Company Profile
Corporate Information
Basic Information
Financial Ratios
Profit Loss
Cash Flow
Balance Sheet
Earnings Summary
Dividend History
Securities Buyback
Company Profile
Chairman Chow Kai Weng
Share Issued (share) 4,517M
Par Currency HKD
Par Value 0.1
Industry Movies & Entertainment
Corporate Profile Business Summary:
The Company is principally engaged in investment holding. The principal activities of the Group included film production and distribution, the provision of management services to artistes,
event coordination, operations of film studio and hotel, and provision of travel related products.

Performance for the year:
For the year ended 31 December 2017, the Group recorded a net loss of approximately HK$193.53 million as compared to net loss for the year ended 31 December 2016 of approximately HK$327.09 million.

Business Review:
Xiqiao National Arts 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 meters and is a unique studio which incorporates tourism and recreational facilities such as film shooting areas, theme parks, hotel and performing arts complexes.

During the year under review, Xiqiao National Arts Film Studio successfully organised a number of events, including “Lunar New Year Celebration and Snow Paradise Event”, “Dreamy Windmill Festival 2017”, “Students Study Tour”, “Candy Kingdom” and “Christmas Carnival”. The number of visitors for “Candy Kingdom” and “Lunar New Year Celebration and Snow Paradise Event” were approximately 340,000 and approximately 220,000 respectively.

During the summer holiday of 2017, the Studio cooperated with a company to organize the “Candy Kingdom” (糖果王國), an event featuring the worldrenowned game “Candy Crush Saga”. The event integrated entertainment and educational activities including music concert, booth games, girls class, exhibition and family candy fun workshop, successfully attracted a lot of parents and children.

In November 2017, the Group renewed a sales partnership agreement with a PRC company in relation to the sales of tickets of the Studio. Pursuant to the sales partnership agreement, the PRC company is appointed as an exclusive agent to sell the Studio’s tickets in the PRC, and undertakes that the sales and distribution of the Studio’s tickets will be at least 1 million per year. It will effectively stabilize the Group’s revenue. Other than the sales partnership agreement, the Group’s wholly-owned travel agency company namely “National Arts Travel Limited” has been established and commenced its business in the year 2016.

The Group believes that the events held and the agreements entered into by the Group will effectively improve the brand awareness of the Studio and will push the Xiqiao National Arts Film Studio Project to the peak.

Film Shooting Base
The film shooting base is the core project of the Xiqiao National Arts Film Studio Project. It covers 374,000 square meters of land, including a lake of 120,000 square meters and numbers of indoor and outdoor studios which are equipped with the most excellent and comprehensive ancillary facilities in order to provide the Southern China and foreign shooting crews the most realistic and delicate scenes.

By virtue of the extensive choices, supreme geographical location and multifunctional ancillary services, the shooting base has been heavily used by the production crews. During the year of 2017, over 90 production crews filmed in the shooting base.

During 2017, the Group has entered into several rental agreement, taking the role of rental agent, with a number of companies renting film shooting equipment. The partners provided the plentiful props, attires and high-tech shooting equipment including lots of ancient costumes of Ming and Qing dynasties, antique furniture, simulated ordnance and other performing props. It is believed that it will bring substantial gain to the Group. Besides creating enormous synergistic effect for the Group, it will enhance the Group’s capability of provision of ancillary services in respect of film shooting, and also facilitate centralization of the industry as well as strengthen the Group's competiveness among the peers.

On 4 January 2018, Foshan Bureau of Culture, Publication, Radio, Film and Television (the “Bureau”) approved a wholly-owned subsidiary of the Company to assist the Bureau in the operation and expansion that would facilitate film enterprises from various regions moving into Foshan, policy presentation, solicitation of investment and funding as well as shooting, etc.; expansion of digital studios; expansion in respect of diversification of props and equipment portfolio, leasing and consolidation of props leasing business.

The Group is the first enterprise designated by the Foshan Government to help building Foshan as the largest hub for props and equipment in Foshan, with focus on film and television industry, which boosted the reputation of the Group in the industry, thereby further consolidating the presence of the Xiqiao National Arts Film Studio in the film and television industry in Southern China.

Wedding Photography
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 leased the Studio with an area of approximately 20 mu (13,333.33 square meters) for a term of 12 years and the wedding photography company invested RMB10 million for the construction of scenic spots in different styles such as 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 approximately RMB1.2 million starting from 2016.

In addition, the Group is negotiating with several jeweler, Chinese and western bakery, Chinese style wedding gown and wedding planning company in order to provide onestop service for wedding couples. The Studio is expected to become a comprehensive wedding hot spot.

The 5-star Hotel located next to the Studio has been officially commenced its operation in November 2015. The Hotel provides 350 suites facilitated from deluxe suites to economic standard rooms. In addition, the Hotel is equipped with a variety of recreational facilities such as SPA, modern swimming pool and chess room. Apart from the recreation, the Hotel also provides commercial services such as business centre, meeting rooms and lecture halls.

With the development of the Hotel and the Studio becoming mature and its popularity having increased, the number of tourists continuously grows, the Group will introduce additional facilities such as beauty service, barbecue facilities and other recreational facilities. And for the catering, it will provide more dining options and maintain high quality of food and services.

At the 17th Golden Horse Awards of China Hotel, the Hotel was awarded “The Most Distinctive Resort Hotel of China in 2016-2017”. Widely accepted as the “Oscar” for the hotel industry in China, the prestigious and authoritative industry award rationalized and concluded the overall development situation of the hotel industry in China and recognized the corporate management quality and service quality of the Group.

Film Production
Entertainment culture is the core value of the Group’s business. The Group is committed to produce and investing in movie and online TV programme to promote the culture and the spirit of entertaining.

The movies invested by the Group, “Ip Man — The Final Fight” (葉問 — 終極一戰) was selected as the opening film of the “Hong Kong International Film Festival” in 2013, and was selected as the recommended film in the “20th Hong Kong Film Critics Society Award”. And “Golden Brother” (男人唔可以窮) also won the best small and medium cost film award in China Image Film Festival. These achievements are really encouraging.

During 2016, the Group invested in the production of a charity film named “the Group's Days in 6E” (“集團的6E班”), which was released in various major cinemas on 21 September 2017. The theme of “the Group's Days in 6E” is in line with the current social status, laden with educational significance. It was well-received in schools and relevant institutions, raising concern and resonance in different levels of the Group's society.

In the 2017 Profima International Film Fest & Awards, “the Group's Days in 6E” was shortlisted in “Best New Director Award” and Shirley Chan (陳欣妍) was a finalist in “Most Promising Actor Award”. The film was nominated in “Best Debut Work of Director” in the “Marianas International Film Festival” as well. While it failed to scoop any award, the nomination was a recognition for a Hong Kong film.

National Arts Films Production Limited (“NA Films”), an indirectly wholly-owned subsidiary of the Company, collaborated with its joint venture for the development of cinema business in a large shopping mall in a transportation hub area of Zhuhai, Guangdong, the PRC.

NA Films held 60% equity interest in the joint venture. The cinema boasts eight screens and a total of more than 730 seats, and have commenced its operation since May 2014 which supports further comprehensive development of the Group’s entertainment and culture business.

Artiste Management
To enhance the popularity of the Group’s artists such as Rose Chan, Brian Yuen, Rachel Chau and Lemon Yip, the Group has arranged a variety of performance opportunities including the participation in the charity movie, “the Group's Days in 6E” (集團的6E班), the online TV series “OCTB” (反黑), brand representative, dramas and being the show host of the Lunar New Year Celebration and guest performers for the “Dazzling Night in Shanghai” gala (情迷夜上海).

Besides, the Group also explores the PRC market for its artists and makes arrangement for them to participate in live reality show and online drama to enhance their popularity.

With the huge market of domestic movies, the Group will continue to recruit artists with potential in the future to cope with the demands in the vast market and expand the artiste management segment, hoping that it will become one of the major income sources of the Group.

Market Trends
According to the statistics published by The People’s Government of Sichuan Province, during the 2018 Lunar New Year holidays, the gross tourism revenue in Guangdong province was approximately RMB42,290 million and representing an increase of 15.4% compared with that in 2017.

The gross tourism revenue in Guangdong Province in the PRC continuously increased during the six years period from 2012 (approximately RMB738,900 million) to 2017 (approximately RMB1,199,300 million). Guangdong Province ranked among the leaders in China in terms of gross tourism revenue.

On 21 March 2013, Motion Picture Association of America published an annual report that China has replaced Japan as the world’s second largest film market after the United States, and this ranking has so far been maintained.

Following the cooling-off period for domestic films box office in 2016, China’s film market, though under huge pressure, eventually reversed the downward trend in 2017. The total box office revenue reached a new record high of over RMB 55.9 billion, representing an increase of 22.31% as compared to last year. With the unprecedented breakthrough in box office and attendance rate, China’s film market has also entered into a reasonably steady period, with a view to becoming a major growth engine in global film market.

Further Development
Currently, China’s film-induced tourism is at the development stage, faced with various problems such as insufficient follow-up abilities in product development and innovation, scattered layout, and limited scale, etc. These problems largely attribute to the effects of inadequate management, absence of policies and consumer environment. The Group will take measures correspondingly in respect of its products, marketing, policies and operation patterns, so as to facilitate a healthy and sustainable development of the Group’s filminduced tourism.

In addition, relying on the themes of films, various filminduced tourism bases have been established throughout the country, and unique and specialized tourism products are proactively developed, in an attempt to meet the cultural needs of the people. Therefore, with respect to the current situation of China’s film-induced tourism and based on the market demand, the Group has formulated a series of development plans, including (i) diversifying film-induced tourism products; (ii) widening the cultural connotations of film-induced tourism; (iii) devising reasonable plans for and focusing on the environment of the Studio; (iv) improving reception service ability; and (v) extending the lifecycle of film-induced tourism products. By doing so, film-induced tourism will be developed into specialized cultural tourism, and its close relationship with films allows it to demonstrate the maximized difference between time and space, the immediacy of dynamic changes and the condensation of activity contents.

With the advent of the leisure era and the further development of the tourism industry, the Group believes that film-induced tourism will present a more promising prospect, advancing in a direction characterized by diversified tourist attractions, individualized tourists, updated tourism contents and integrated planning and construction.
Information from the financial statements of listed companies
Last Update: 2018/05/04
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