Qin Jia Yuan Media Services Company Limited 2011 Financial Results

HONG KONG, Dec. 28, 2011 /PRNewswire-Asia/ --

Highlights

• Annual turnover surged 74.8% year-on-year to HK$742,234,000
• Net profit of HK$54,468,000
• Final dividend of HK 0.03 cent per share, annual dividend payout ratio of 24%

Qin Jia Yuan Media Services Company Limited (Stock code: 2366, hereafter referred to as "QJY" or "the Group") announced its 2011 annual results. The Group recorded a net profit of HK$54,468,000 as the effects of the global financial tsunami have receded. The Group has identified opportunities and focus on cultural industries and media services in China, particularly in TV production and content provider, which are the few major sectors heavily supported by national policies.

The Group's annual turnover surged by 74.8% on a year-on-year basis to HK$742,234,000. Earnings per share were HK6.16 cents (2010: HK10.64 cents).

The Board of Directors proposed a final dividend of HK0.03 cents per share (2010: HK1.28 cents). Together with the interim dividend of HK1.28 cents paid during the year under review, the annual dividend for the year under review was HK1.31 cents (2010: HK2.56 cents). The annual dividend payout ratio was 21%. Shareholders may elect to receive cash in lieu of script dividend.

QJY's Major Business - TV Program Production & Distribution

During the year, the Group continues to develop its core business of TV drama production and distribution. Since 2010, the Group, and has completed the production of 110 episodes of TV dramas under the new co-operation model adopted after the financial tsunami in 2009 to ensure a more secure investment and production of TV drama projects. We were able to achieve this with the support from long-term partners in TV production and distribution. This strategy has proven to be effective in helping the Group to maintain a substantial profit as well as to secure our market share. This co-operation model has guarded the Group's investment in TV dramas against the risk of production write-off due to long payoff period in the event of any future financial tsunami or global economic downturn. In December 2010, the Group has entered into an agreement with China TV Program Production Centre Company Limited, owned and controlled by China Central Television ("CCTV"), to cooperate in the planning, investment, production and distribution of TV dramas for a term of four years. The first co-produced TV drama, "Eagle's Nest -- Reserve Officer", has been completed during the period under review and is expected to broadcast during prime time in the first half of 2012 on CCTV. In 2012, the preparation work of around 6 TV drama series (comprising over 200 episodes) will be commenced in collaboration with CCTV.

While taking advantage of the national policies of stimulating the cultural industries and the competitive edges of the new media amongst the TV drama network and online broadcasting rights, the Group will also make use of its established relationship with CCTV and provincial TV stations on TV drama production, so as to focus on the production of quality TV dramas and, hence, maintain its position as one of the leading TV drama producers in China. In addition, the abundant inventories in the Group's film library continued to realize considerable rental and disposal income, demonstrating the strength of the TV drama business in the China market and the ability to generate recurring income for the Group

Various Business Segments in the Cross-Media Business Platform

• TV Advertising

The Group has adjusted its operating strategies for TV advertising to focus on quality and popular TV programs aired on major TV channels. Such mode of operations not only improved the Group's cash flow, but also allowed the Group to provide advertisers with more comprehensive and better quality services in a more effective way. On 2 April 2011, the Group acquired 55% shareholding in Clear Light Group Limited, the key management of which has been engaged in the advertising business in China for more than 10 years with an impressive track record.  Through its controlling interest, the Group has strengthened its team of professionals in the domestic TV advertising business and creates a synergy within the Group.

• Outdoor Advertising

The Group's outdoor advertising business incurred a loss for the second half of 2011. This was mainly due to the temporary suspension of news and advertisements on a large LED board in Beijing in the early part of 2011 which resulted in cancellation of advertisement orders by customers of the Group and also adversely affected the advertising revenues of other related LED boards as the advertising rights were sold in a "bundle".  However, the results of CBS Outdoor (Beijing) Limited, which  engaged in bus advertising of over 6,000 buses in metropolitan area of Beijing, of which the Group has a 22.95% effective equity interest, recorded a profit as per plan.

• Marketing Services

The Group's marketing and public relations business continued to develop in China. In addition to new clients, the Group's marketing services has also been extended  to provide support to TV drama production and distribution by providing quality and efficient public relations and marketing services for the sponsors of the TV dramas. 

• Artist Management and Concert Production

The growth of the Group's TV drama business will require plenty of new talents. In view of this, the Group aims at providing valuable performing opportunities for artists. During the review period, the Group, had organized concerts in China, provided professional concert planning and production services to its peers and commenced the artist management business. The Group plans to actively arrange its artists to participate in the TV drama programs and concerts.

• New Media

Beijing Tianxiashuqu Technology Development Company Limited* which was acquired by the Group last year, has established a strong operating team for the Group's new media business  which  has  recently been determined to be the Group's new business focus. Moreover, the online publications on the works and the adaptation rights on publications by Dr. Leung Anita Fung Yee Maria (publications already owned by the Group) have already achieved considerable potential sponsorship revenue for the Group.  The Group intends to employ an active, steady and prudent manner in its development of new media for its cross-media platform.

About Qin Jia Yuan Media Services Company Limited (Stock code: 2366)

Founded in 1995 and listed on the Hong Kong Stock Exchange in 2004, Qin Jia Yuan is one of the leading enterprises engaged in a diversified, foreign-owned media business in China with leading capabilities in cross-media advertising sales, content production and marketing services.

* For identification purpose only

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