Overcame Various Difficulties, Actively Created Business Opportunities, Return to Profitability
HONG KONG, March 31 /PRNewswire-Asia/ -- Media China Corporation Limited ("Media China" or the "Group") (Stock Code: 00419.HK), a leading media group, satellite channel operator and entertainment content provider in China, today announced its audited consolidated results for the year ended 31 December 2009.
Highlights:
-- Achieved revenues of HK$276,451,000 from continuing operations, an
increase of 54% compared to 2008
-- Returned to profitability and recorded gross profit and net profit from
continuing operations of HK$96,979,000 and HK$66,084,000, respectively
-- Completed an open offer and a share placement in December 2009 and
raised net proceeds of approximately HK$430 million. IDG Capital
Partners, a well-known professional investment fund, was introduced as
strategic shareholder, and the Group's shareholding structure and
capital base were further strengthened
-- Financial and liquidity position further improved, cash and bank
balances reached HK$643,037,000 at the end of 2009, almost tripled that
at the end of 2008
During the year 2009, sales revenue from the Group's continuing operations was HK$276,451,000, an increase of 54% over last year. The significant growth in sales revenue was mainly because television advertising revenue increased by 54% to HK$274,410,000. The Group successfully achieved a turnaround in 2009. Excluding the loss from discontinued operation, profit before tax and net profit from continuing operations were HK$66,497,000 and HK$66,084,000 respectively.
Mr. Edward Tian Suning, Chairman of Media China, commented, "The year 2009 was filled with challenges for the global economy. At the same time, challenges and opportunities also coexisted for the advertising and media sectors in China. In respond, the Group strove hard to explore revenue sources for our television advertising and content production businesses while enhancing efforts in risk management and cost control and managed to return to profitability."
The Group completed an open offer and a share placement during the year 2009 and raised net proceeds of approximately HK$430 million. IDG Capital Partners, a well-known professional investment fund, was introduced as strategic shareholder. The management believes this will further strengthen the Group's shareholding structure and capital base. Moreover, the Group's financial position was further improved after the open offer and share placement, providing a solid foundation for its sustainable development. The Group's Cash and bank balances reached HK$643,037,000 at the end of 2009, almost tripled over the end of 2008.
During the year 2009, the television advertising segment remained the biggest revenue contributor to the Group. The advertising revenue was mainly derived from the provision of media resources procurement services to international advertising agencies and direct customers, and from being the exclusive advertising agency for the Travel Channel. Segment revenue increased 54% comparing to the prior year and reached HK$274,410,000. The growth rate was much higher than the 15% industry growth rate in TV advertising expenditure in China for 2009.
The major contributor to the Group's television advertising segment is the exclusive advertising agency business for the Travel Channel. During the year 2009, the Travel Channel's advertising revenue increased by 41% and accounted for approximately 91% of total revenue from the television advertising segment. This was mainly driven by organizing nationwide reality shows and competitions, enhanced program title sponsorship sales and extension of broadcast coverage into more second-tier cities. Moreover, a new joint venture formed by the Group and a wholly-owned subsidiary of Hainan TV became the exclusive advertising agent of the Travel Channel with effect from 1 January 2010. Meanwhile, Ms. Wang Ping, the former deputy chief editor of Hunan Satellite TV and acclaimed "The Queen of Variety Shows", was appointed as the general manager of the joint venture and of Hai Nan Haishi Tourist Satellite TV Media Co., Ltd ("Hainan Haishi"). Management believes that the quality of TV programs on the Travel Channel and its advertising sales will further improve after introducing a seasoned management team.
In 2009, the media resources procurement business achieved satisfactory growth. It helps customers to procure media resources from local TV stations in China and offers them one-stop solutions ranging from planning, broadcasting and monitoring of advertising to payment logistics. During the year 2009, the media resources procurement business contributed 9% of the total revenue of the television advertising segment. The management believes that the ratio will rise further and thus broadening our income base through strengthening strategic partnerships with international advertising agencies and expanding its customer base with direct customers.
During the year 2009, the Group re-launched its content production business with a prudent approach. The box office revenue in Mainland China from its maiden investment film - "Bodyguards and Assassins" approached to RMB300 million. Moreover, The Group and Shanghai Media Group ("SMG") will jointly invest in the production of a TV drama called "Grandmaster". The scripts for the domestically produced drama have almost been completed and shooting is expected to commence in later this year. Besides, the Group and a group company of IDG Capital have jointly invested in the production of a film called "Snow Flower and the Secret Fan", starring famous actress Li Bingbing and Jun Ji-hyun.
Looking ahead, the management has set clear target for the Travel Channel -- to breakthrough advertising revenue of RMB 700 million within the next five years. While striving to generate more revenue by organizing major events and seeking special sponsorship and program title sponsorship income, the Travel Channel will actively strengthen cooperation with local governments and tourism administrations on the production of travel-related promotional programs. For instance, it entered into an agreement with Guangdong Provincial Tourism Administration to jointly produce a program called "Guangdong in the Eyes of Asians". In addition, the Travel Channel also plans to gradually extend coverage into second and third-tier cities in China and targets to reach 600 million audiences. The Group will also focus its effort in the development of medium and large local clients in China and expanding its media resources procurement services with direct customers by providing them with professional advertising agency services of international standards. The Group has set an investment budget of HK$100 million for the content production business and will continue to seek partners for joint investment in the production of premier films and TV programs.
The Chinese government energetically promotes the development of the cultural and tourism sectors. Earlier this year, the State Council has approved the strategic plan for the development of Hainan province as "Hainan International Tourism Island". The Travel Channel, with its base in Hainan province, will definitely be benefited with new incentives for future growth. Hinged on the Travel Channel and leveraged on our cross-media platform, we foresee enormous business opportunities in these sectors.
Mr. Tian said, "The Group will continue to aim at developing an integrated platform that incorporates both traditional and new media. As the State Council of the PRC proposed accelerating the convergence of telecommunications, broadcasting and Internet networks in China, this will create new opportunities for the Group. We will keep a close watch on latest developments and enhance efforts in research and development so as to become a beneficiary of the policy. Meanwhile, we will strive hard to seize opportunities and realize fully the synergies of various businesses, aiming to achieve sustainable growth and create greater value for shareholders."
About Media China Corporation Limited
Media China Corporation Limited (Stock Code: 00419.HK) is a leading media group, satellite channel operator and entertainment content provider in China. As a media company with one of the largest libraries of films, TV comedies and dramas, Media China is engaged in various media related businesses in China, including consolidation and sale of advertising resources, and the production of television programmes, advertisements, television dramas and movies. For more details, please refer to its website: http://www.mediachina-corp.com .
For more information, please contact:
Media China Corporation Limited
Raymond Hau
Tel: +852-2877-8412
Email: raymondhau@mediachina-corp.com
PRChina Limited
Henry Chik
Tel: +852-2522-1368
Email: hchik@prchina.com.hk
David Shiu
Tel: +852-2522-1838
Email: dshiu@prchina.com.hk
