|Corporate Profile ||Business Summary: |
The Company is principally engaged in investment holding. The principal activities of the Group include film production and distribution, the provision of management services to artistes, and operations of film studio and hotels.
Performance for the year:
During the year under review, the Group reported a turnover of approximately HK$15.3 million, an decrease of 20% as compared to the turnover in previous year for the continuing operation.
For the year ended 31 December 2014, the Group recorded a net loss of approximately HK$148.9 million as compared to net loss of the preceding year of approximately HK$24.22 million.
Xiqiao National Arts Film Studio Project
Located in Foshan city, Guangdong province, the Group’s Xiqiao National Arts Film Studio project has a total developed land area of 444,000 square metres and is an unique studio which incorporates tourism and recreational facilities such as film shooting area, theme park, hotels and performing arts complex.
Xiqiao National Arts Film Studio started soft commencement in December 2014. It is the studio will become one of the hot tourist spots in Guangdong province which could attract tourists and provide them with immersive entertainment experience.
Film Shooting Base
The film shooting base is the core project of the Xiqiao National Arts Film Studio and equips with the most excellent and comprehensive ancillary facilities featuring the most realistic and delicate details in the South China. The film shooting base covers 374,000 square metres, including a lake of 120,000 square metres.
The shooting scenic spots have been completed and is partially opened to production crews for lease, during the second half of the year, serveral films and TV series were produced here by virtue of the extensive choices of the shooting base. The film shooting base can provide diversified and extensive scenes for crews of the Mainland China as well as overseas companies and is expected to attract a certain amount of film production companies all over the world due to its supreme geographical location and multi functional services provided. Furthermore, the Group is considering inviting famous retail organizations to set up their retail shops in the shooting base to provide necessary commodities to guests.
With the partial opening of the film studio and further development of shooting base, it is believed that it will become one of the important sources of income to the Group and bring substantial gain to the Group as enormous synergistic effect will be created and more tourists will be attracted. In the forth quarter of 2014, major events such as Halloween and Christmas Celebrations being held in the film shooting base successfully attracted number of tourists and hence take the film studio into new heights. Going forward, the Group will keep adding special touch to any celebrations and aim to create memorable experiences to the tourists.
A 5-star hotel next to the studio and facilitated from deluxe suites to economic standard rooms to cater to tourists’ needs has been partially constructed. The Hotel is features a modern European design, luxurious fabrics, hues of yellow and gold, the suites are lavishly furnished with a collection of furniture in grand design. The Group acts ahead in providing thoughtful services to meet the needs of the guests such as SPA, Business Centre, Modern Swimming Pool, Shifter Kart which allow the group’s guests to have a splashing good time.
350 suites, would be provided and it is the one of the most luxurious and distinctive hotels in the region. In February 2015, the hotel obtained a high utilization rate during the Lunar New Year. Besides, the Group would seeking opportunities to provide comprehensive services with additional facilities to cater tourists’ needs.
As to the film production segment, the Group made cooperated with New Culture (新文化) and Cayie Movie&video Communications Co. Inc (凱羿影視傳播) in the production and distribution of Golden Brother (男人唔可以窮) which is captured novel. The production of this inspiring movie was completed and was shown in cinemas in Hong Kong and PRC in July and December 2014 respectively.
National Arts Films Production Limited (“NA Films”), an indirectly wholly-owned subsidiary of the Group, collaborated with its joint venture for the development of cinema business in a large shopping mall in a transportation hub area of Zhuhai.
NA Films held 60% equity interest in the joint venture. The cinema boasts eight screens and a total of more than 730 seats, and had commenced its operation since May 2014 which support further comprehensive development of the Group’s entertainment and culture business.
Subsequent to the completion and commencement of operation of the film studio, and with the huge market of domestic movies, the Group will recruit more artists with potential in the future to cope with the demands in the vast market. Apart from the films produced by the Group, the group’s artists Marvel Chow, Rose Chan, Kitson Shum will also perform and participate in different films and TV series. Besides the Group will identify suitable institutions for them to serve as spokerspersons and participate in advertising photography. The Group will continue to recruit artists with potential such as Rachel Chau, and expand the artiste management segment, hoping that it will become one of the income sources of the Group.
The Group reached an agreement with a renowned domestic wedding photography chain group in the fourth quarter of 2013 to develop its new wedding photography business. Through which, the Group will cooperate with the wedding photography company through the leasing of the film studio with an area of approximately 20 mu (13,333.33 square metres) for a term of 12 years and the wedding photography company will invest RMB10 million for the construction of scenic spots in different styles such as the European, Korean and Japanese styles and guarantee there will be at least 28,800 couples taking wedding photos in the scenic spots per year. The annual income of this arrangement will be no less than RMB1,152,000 starting from 2016.
The wedding photography business can provide stable cash flow and visitor flow to the Group, and facilitate the hotel and catering businesses within the film studio area. Furthermore, the Group is negotiating with wedding service-related companies such as famous jeweler, bakery, Chinese wedding gown providers and wedding planner to set up their branches in the film studio so as to provide one-stop services to couples in a comprehensive wedding base.
According to the statistics published by State Administration of Press, Publication, Radio, Film and Television, the box office receipts in Mainland China in 2014 reached RMB29.6 billion (equivalent to approximately HK$37 billion) , representing an increase of 25% from the previous year, indicating that the PRC film industry remained at a stage of rapid growth in 2014. This, combining with a series of favourable policies for the tourism and culture industry introduced by the central government, will build a favourable business environment for the Group’s film and entertainment business. The Group is fully confident in the film industry and will continue to foster its development.
As for tourism, according to a statistics published by Renmin Wang, the total tourism revenue in Guangdong province was RMB922.7 billion (approximately HK$1,153.38 billion) in 2014 (2013: RMB830.5 billion), total visitors attained 320 million people which was the highest across the PRC and representing an increase of 12% compared with the previous year. The rank of Guangdong province in China in terms of total tourism revenue was again the first this year.
The Group believes that its new tourist substance and excellent ancillary facilities will become a bright point of the tourism industry in Guangdong province. The Group is confident that the operations of the film shooting base, the hotels, tickets sales, the cinema and the wedding photography business will bring satisfactory return to the Group.