HONG KONG, April 1, 2014 /PRNewswire/ --
| HK$'000 | For 12 months ended 31 December |
Change | |
| 2013 | 2012 | ||
| Turnover | 1,452,369 | 911,707 | 59 % |
| Revenue | 1,417,684 | 857,205 | 65% |
| Gross profit | 895,881 | 478,343 | 87% |
| Gross profit margin | 63.2% | 55.8% | +7.4p.p. |
| Operating profit | 325,123 | 53,974 | 502% |
| Profit for the year | 115,718 | 20,313 | 470% |
| Basic earnings per share (HK$) | 1.38 cents | 0.38 cents | 263% |
SMI Corporate Limited ("SMI" or the "Group," HKSE stock code: 198), one of the largest cinema operators in China and renowned Chinese movie production and investment company, is pleased to announce its full-year results for the 12 months ended 31 December 2013 ("The Year").
In 2013, the Group's revenues were mainly comprised of theater operation, investments in film production and distribution, and in-theater counter sales business, within movie theaters. During the year, the Group's operating revenue was approximately HK$1,418 million, up 65% year on year. Gross profit surged 87% to approximately HK$896 million with gross profit margin of 63.2%, up 7.4 percentage points. Operating profit surged 5 times to approximately HK$325 million. And profit for the year was approximately HK$116 million, up 470% year on year. Such increase was primarily attributable to the increased number of movie audiences encouraged by PRC Government's vigorous promotion in developing culture industry. As a result, the Group recorded a better performance in the theater operation and related businesses during the year.
Business Review
In 2013, the Group stayed focus on its business philosophy and took advantage of the development trend of film industry. At the same time, the Group vigorously developed stellar mobile e-commerce clients to expand the new channel terminals with development potential. During the year, the Group achieved significant growth on all business segments.
During the year, the revenue generated from Theater Operation segment increased 65% to approximately HK$1,204 million, and the profit from this segment was approximately HK$184 million, representing a significant growth of 47.5 times. Such substantial increase was mainly driven by the increased income from box office. As at 31 December 2013, the Group was operating a total of 68 movie theaters in major cities in China with up to 490 screens, representing an increase of 31% and 35% year on year, respectively (2012: 52 movies theaters, 363 screens). During the year, the Group increased its market share in the first tier cities like Beijing, Shanghai, Guangzhou and Dongguan, and also extended Theater Operation segment to the second and third tier cities with great potentials, including Chengdu, Rugao, etc., so as to further expand its strategic planning in China and consolidate its leading position among the movie theater operators in China. In February 2014, the Company announced the plan of acquiring certain equity stake in Ticket China Holdings. The Group plans to develop an online-to-offline ("O2O") integrated marketing platform through Ipiao.com, a one-step platform of entertainment social networking, and online ticketing services in China.
In 2013, movies and TV series distributed by the Group received good publicity and recognition. The Chinese film industry has embarked on a high-speed growth period. Investments in film production and distribution segment recorded revenue and profit of approximately HK$163million and HK$78million, respectively, representing significant year-on-year growth of 130% and 152%, respectively. During the year, in line with "providing high-quality audiences with best movies", our Group invested in many well-received movies and TV series, such as "American Dreams in China", and "Troubled Times Three Brothers", which contributed profit to the Group for approximately HK$42 million and approximately HK$13 million, respectively.
During the year in review, the complementary business of the Group developed rapidly and has become one of the strong revenue resources. Launched at the end of 2011, Xingmeihui focuses on in-theater counter sales and online shopping platform. After two years of planning and development, Xingmeihui has developed into the new growth momentum of the Group. The segment achieved a revenue of approximately HK$48 million, representing a significant a year-on-year increase of 8%. The Group also vigorously expanded the O2O business and opened up online and offline channels. Through pooling resources to promote Xingmeihui, the platform of online shopping and in-theater counter sales, the Group is devoted to make it a top brand in China. In February 2014, the Company signed a cooperation agreement with JD.com, an online retail giant of electrical appliances and digital products in China. Through this cooperation, the Group can comprehensively enlarge the varieties of digital goods in xingmeihui.com, which will help Xingmeihui increase its market share, thus improving sales and enhance the brand influence.
Prospect
Looking forward, the Group will strategically expand our business by achieving the targets simultaneously. On one hand, the Group will accelerate the investment in cinemas to reach the target of having 200 movie theaters in three years (an annual increase of 40 theaters), owning over 1,000 projection screens, getting 80 million audience, and attracting 10 million members. On the other hand, the Group will push forward the construction of mobile e-commerce channels in full swing. It is expected that in the next three years, stellar mobile e-commerce will have 50 million users, 200 e-malls, and 300 digital experience museums. The Group believes that stimulated by continuous integration and reorganization, it will achieve promising success and create values for shareholders in the future.
Mr. Cheng Chi Chung, Chief Executive Officer of SMI, stated: "The film industry in China has entered into a golden period of growth. In response to the immense opportunities and challenges, our Group will continue to maintain the prudent operation strategy, embrace the comprehensive integrated business model, and take advantage of the powerful channel terminals nationwide to ensure the sustained growth of performance. In the future, the Group will focus on promoting the construction of the two channels of cinema terminal and mobile terminal to realize a brand new pattern of compound development of the two terminals, make full use of the O2O platform to secure the Group's leading edge in terminal channels, and promote the Group's other business based on the national channel terminal network, devoted to be the leader of China movie industry."
