Will focus on core movie theatrebusiness, and actively expand into non-box office businesses

Highlight

• Revenue increased by 8% to approximately HK$2,448million
• Gross profit increased by 14% to approximately HK$883 million
• Operated approximately 365 movie theatres with a total of approximately 2,290 screens as at 30 June 2017, increasedby 47 movie theatres and 280 screens respectively
• Pushingforward the strategy of "one cinema in every county", that is, to operate atleast one movie theatre in every county in China in order to capture theopportunity and consolidate its leading position in the industry.

Financial Highlight

HONGKONG, CHINA - Media OutReach - 31 August2018 - SMI HoldingsGroup Limited (HKSE stock code: 0198.HK, the"Company" or "SMI") and its subsidiaries (collectively referred to as the"Group") announced its interim results and financial position for the sixmonths ended 30 June 2018 (the "Reporting Period"). During the Reporting Period,the Group's revenue recorded HK$2,448 million, representing an increase of 8% period-on-period(corresponding period in 2017: HK$2,259 million). Profit for the periodattributable to owners of the Company reached approximately HK$301 million.

Basicearnings per share were HK$11.06 cents (corresponding period in 2017: HK$11.22cents).

Business Review

Benefitedfrom China's burgeoning movie market, the Group's profit for the 6 months ended30 June 2018 reached approximately HK$301 million. During the Reporting Period,the Group's operating revenue was approximately HK$2,448million, representingan increase of 8% as compared with approximately HK$2,259 million for the sameperiod in 2017. Gross profit was approximately HK$883 million (same period in2017: approximately HK$774 million), representing a gross margin of 36% (sameperiod in 2017: 34.3%). Earnings before interests, taxation, depreciation andamortization (EBITDA) was approximately HK$677 million (same period in 2017:HK$648 million), represent an increase of 5% compared to the same period oflast year.

MovieTheatre Business

（For the six monthsended 30 June ）

Thanksto the thriving industry, the Group's movie theatre business has achievedstable progress. For the 6 months ended 30 June 2018, the Group's movie theatrebusiness generated a revenue of approximately HK$1,524 million.

TheGroup will continue to leverage on the advantage of the industry. Whilemaintaining our leading position in Beijing, Shanghai, Guangzhou, Shenzhen andother first-tier cities, SMI has vigorously expanded to the second and thirdtier cities, which possess huge potentials for box office receipts, by speedingup its nationwide acquisitions, as well as pushing forward the strategy of "onecinema in every county", that is, to operate at least one movie theatre inevery county in China in order to capture the opportunity and consolidate itsleading position in the industry.

SMI Living

SMI Holdingshas been well established in the movie market for a long time. Relying on theadvantage of its main business and actively exploring its channels, theproportion of its comprehensive income from non-box office business has farexceeded the average level of its peers in the industry, thus creating a brandnew business path with sufficient differentiation and competitiveness, whichhas opened up a new era in the operation of cinema malls.

With nearly43.75 million members it has accumulated, SMI took the lead in developing a consumptionmodel of "online and offline synergistic marketing", and multi-dimensionally exploredthe potentials in members' consumption. "SMI Living", the Internet platform ofSMI, was launched in 2015. Through its big data analysis system and membershipprivilege management system, the platform has led to a thorough online andoffline integration of industry chains of SMI, and has become the online portaland entry point for various business lines of SMI. "Xingmeihui",

an offline shopestablished in 2012, has already populated in all the SMI cinema mallsnationwide. With SMI theatres as the focal point, customers in communitieslocated within two kilometers are offered free delivery of diversifiedproducts, thus providing the customers with intimate encounter with productsand brand names. "SMI Living" targets at the young and fashionable crowd. Withthe special characters of movies, culture and entertainment, brand promotion iscarried out through theatres, WeChat, Weibo, forums, media, communications andphysical stores, while at the same time online marketing service is provided toboost the operation of Xingmeihui and bring the consumption experience to thecustomers. In the first half of the year, SMI has been authorized by AppleChina to set up apple authorized stores in SMI's cinema lobbies which allowsall members to purchase the latest Apple products while enjoying movies andfurther helps the construction of SMI's ecological system of "Internet+cinemaaudience+daily life services+two-kilometer ecological circle" with an aim tosubstantially increasing its overall profitability.

Prospects

Underthe uncertainties brought by the US interest rate hike and China-US trade war,market sentiment and consumer spending will be more or less affected and theoverall operating environment will probably face challenges to a certainextent. The Group will continue to review its business strategies and implementprudent financial management to respond to possible new challenges.

Lookinginto the future, it is expected that movie watching will continue to be apopular entertainment in China. In the second half of 2018, the launching ofdomestic blockbusters will continue. Xu Zheng's "Dying to Survive", Huang Bo's"The Island (2018)", Shen Teng's "Hello Mr. Billionaire" as well as varioustypes of movies including mega productions with special effects such as "TheMeg", "Detective Dee: The Four Heavenly Kings" and the suspense movie "Candlein the Tomb: The Valley of Worms in Yunnan" will be released one after another,feeding the audience's appetite of the Chinese movie market with a feast fortheir eyes in 2018 and in the coming year. The Group's movie theatre businesswill continue to benefit from the development momentum of the industry.

Currently,SMI Holdings Group Limited continues its commitment in implementing thestrategy of comprehensive service chain. In addition to the traditional of foodand beverages, red wine, advertising and promotion businesses, SMI has launchedthe strategy of "Two Kilometers Perimeter from Theatres Ecosystem", andestablished the SMI Logistics Delivery Company to promote online and offlineconsumptions. In the future, the Group will focus on our core business, themovie theatre business, while at the same time actively expanding into non-boxoffice businesses.

About SMI Holdings Group Limited

SMI HoldingsGroup Limited (HKSE stock code: 0198.HK) is a companylisted on the Main Board of the Stock Exchange of Hong Kong. The Company isprincipally engaged in the business of movie theatreoperating and new complementary business, such as SMILivingand advertising & promotion business. Under its strong management team andpowerful business network, the number of SMI's movie theatrehas grown from 3 in 2009 to approximately365 at 30 June 2018.