omniture

Net Profit And Turnover of SMI Holdings for 2016 Surged 12.2% And 14.6% Respectively; Targets to Operate A Total of 500 Movie Theatres By The End Of 2017

2017-03-31 23:02 3075

Highlight

  • Benefiting from the favorable trend of the movie industry in the PRC, turnover increased by 14.6% to approximately HK$3,351.2 million
  • Profit for the year attributable to owners of the Company increased by 12.2% to approximately HK$403.7million
  • Operated approximately 260 movie theatres as at 31 December 2016
  • Targets to operate a total of 500 movie theatres by the end of 2017
  • The Group aims to implement the strategy of "one cinema in every county", that is, in every county in China, the Group plans to seize the business opportunity to at least operate one movie theatre

Financial Highlight


For the year ended 31 December

HK$'000

2016

2015

Change

Turnover

3,351,186

2,924,086

+14.6%

Profit for the year

407,104

368,361

+10.5%

Profit for the year attributable to owners of the Company

403,724

359,964

+12.2%

HONGKONG, March 31, 2017 /PRNewswire/ --SMI Holdings Group Limited (HKSE stock code: 198, the "Company" or "SMI") and its subsidiaries (collectively referred to as the "Group") announced its annual results and financial position for the year ended 31 December 2016. During the year, benefiting from the favorable trend of the movie industry in the PRC, the Group's turnover recorded HK$3,351.2 million, representing an increase of 14.6% as compared with the corresponding period in 2015 (2015: HK$2,924.1 million).

Profit for the year attributable to owners of the Company increased by 12.2% to approximately HK$403.7million (2015: HK$360.0 million).

Business Review

Movie Theatre Business

According to statistics of the Film Division of the State Administration of Press, Publication, Radio, Film and Television, for the year ended 31 December 2016, the total number of screens in China reached 41,179, representing a growth of 9,552 screens. China's total box office receipts reached RMB45.712 billion. Benefiting from the favorable trend of the industry, the Group's movie theatre business also achieved excellent development. During the year ended 31 December 2016, the segment of movie theater business generated revenue of approximately HK$2,951 million (2015: HK$2,559 million), representing an increase of 15.3% as compared with the corresponding period in 2015.

As at 31 December 2016, the Group operated 260 movie theatres in major cities with a total of approximately 1,820 screens, as compared with 200 movie theatres and approximately 1,400 screens as at 31 December 2015. The Group will continue to maintain its competitiveness in the first and second tier cities, and extend its coverage to the third and fourth tier cities through investment by acquisition and self-operation in movie theatres.

SMI Living

Retail business

During the year ended 31 December 2016, the segment of retailed sales business generated revenue of approximately HK$383.0 million, (2015: HK$363.8 million), representing a increase of 5.22% as compared with the corresponding period in 2015. A profit approximately HK$23.9 million was recorded in this segment (2015: HK$29.3 million).

During the reporting period, as SMI increased its theatre operations, it continuously return benefits to its members through innovation and sincerity. As at end 2016, under the new member scheme, number of members accumulated to 25 million. To ensure members enjoy extraordinary and prestigious benefits and movie watching experience, the Group will tailor-make member-exclusive theme sales packages, movie themed packages and other SMI Living gift packages to satisfy customers' buying needs.

In addition, current customers who make purchases through SMI online or offline platforms enjoy free of charge, convenient and speedy home delivery service within a 2 kilometer perimeter from the theatres. The Group established the O2O electronic mall, "SMI Living", on the foundation of theatre channels, and is now conducting the precise market positioning, and formulating a clear development strategy. The objective is to provide the customers with high quality and diverse products. As product lines are successively in place, the Group's non-box office business development has become more complete and mature. SMI Living will deeply integrate various industry chains under SMI Holdings Group Limited, with an objective to comprehensively satisfying the customers' needs in lifestyle and entertainment. The users will be provided with a super service platform with content-rich, unique consumer products and lifestyle services, to  over five major daily life areas including movies, consumer products, communications, tourism, and finance. The members are able to enjoy safe, convenient, fashionable and entertaining one-stop service.

At the same time, SMI Living's offline shops are all over Stellar Cineplex cinema malls across the country, driving offline businesses and consumer experiences.

Prospects

In recent years, with the rapid and forceful growth of the domestic film market, the sustained growth of box office receipts, and the enormous amount of funds entering the film and television industry, the development of the film and television industry will accelerate and face a breakthrough. Regarding government policies, the Shenzhen-Hong Kong Stock Connect officially launched on 5 December last year. For three months, cross-border funds showed a net inflow, which represents a long-term positive trend for the Shenzhen-Hong Kong Stock Connect concept stocks. SMI Holding, as a domestic leading listed film and TV company, has been developing this market for a long time, and its core resource advantage in the industry is obvious. Under the circumstances of the rapidly and forcefully growth of China's movie market, SMI Holdings Group Limited will achieve rapid growth. The Group will continue to rely on its advantage in the industry to actively develop its movie business, and strive to meet the target of operating 500 movie theatres by the end of 2017. The Group aims to implement the strategy of "one cinema in every county", that is, in every county in China, the Group plans to seize the business opportunity to at least operate one movie theatre. In March 2017, Chengdu Runyun Culture Broadcasting Limited, a subsidiary of the Company, has raised RMB2.5 billion by introducing new investors. The Group will study the feasibility of listing Chengdu Runyun on the PRC's A-share market through a proposed reorganization. Looking forward, the Group will continue as a holding company by owing the existing subsidiary SMI Culture & Travel Group Holdings Limited (HKSE stock code: 2366) and the potential new A-share listed companies, as well as will seek to own more business in movie industry.

Currently, the SMI Group Holdings Limited is striving to implement the comprehensive service chain by developing non-box office businesses to increase revenue. In addition to the traditional food and beverages, advertising and promotion businesses, SMI launched the "Two Kilometers Ecosystem" strategy. The Group will introduce more strategic partners and experiential products, to enhance overall customer consumption and cinema output In future the Group will continue to develop resident designer product cooperation, and increase online financial services, personal wealth management and insurance, as well as a series of products, such as film premieres, red wine tasting events, fashion shows, and fans-tailored movies, while providing onestop service such as delivery and personal after-sales services so as to satisfy movie watching members' strong need for products.

SMI Living will be one of the Group's key areas of concern. The previous concept of channelbased development strategy has now change to the core philosophy of "customer orientation". A two kilometer commercial ecosystem will be built by integrating a mature O2O business model, with an extensive network of channels, guided by the members living necessities, and centering around the movie theatres. An advanced internet of things platform, focused on the area of dailylife services, will be constructed with internet as its path. It serves to provide the member users with customized solutions for their daily consumption, and helps to realize the customized C2B feedback services model.

-End-

About SMI Holdings Group Limited (0198.HK)

SMI Holdings Group Limited (0198.HK) is a company listed on the Main Board of the Stock Exchange of Hong Kong. The Company is principally engaged in the business of movie theatre operating and new complementary business, such as SMI Living and advertising & promotion business. Under its strong management team and powerful business network, the number of SMI's movie theatre has grown from 3 in 2009 to approximately 260 at 31 December 2016.

Source: SMI Holdings Group Limited
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