Transmit Entertainment Turns Around to Profit in 1H FY18/19 Revenue More Than Doubled to HK$395.3 Million

February 28, 2019 - 09:14
Transmit Entertainment Turns Around to Profit in 1H FY18/19 Revenue More Than Doubled to HK$395.3 Million

Further Diversifies Business Portfolio Excellent Artiste and Screenwriting Teams Contribute to Successful Production of Copyright Projects


HONGKONG, CHINA MediaOutReach - 27 February 2019 - TransmitEntertainment Limited ("Transmit Entertainment" or the "Company", togetherwith its subsidiaries, the "Group"; stock code: 1326) today announced itsunaudited interim results for the six months ended 31 December 2018 (the"Review Period").


During the Review Period, theGroup recorded outstanding results, with revenue up by 211.8% to HK$395.3million when compared with the last corresponding period. Attributable to theprofit contributed by Khorgas Houhai Culture Media Company Limited ("HouhaiCulture") as well as the revenue growth generated from the production anddistribution of the film "L Storm" (L風暴), the Group turned around toprofit with total comprehensive income attributable to owners of the Companyamounting to approximately HK$46.5 million. Gross profit was approximatelyHK$174.6 million, representing an increase of 125.7% and gross profit marginwas approximately 44.2%. As at 31 December 2018, the Group was in a soundfinancial position with bank balances and cash and pledged bank deposits ofapproximately HK$113.4 million.


Business Review

Film and TV Series Production and Distribution

During the Review Period, filmand TV series production and distribution business remained the core businessof the Group with reported revenue of approximately HK$268.5 million,representing a significant increase of approximately 743.3% compared with thelast corresponding period. The Group released two films during the ReviewPeriod, namely "L Storm" (L風暴) and "Lucid Dreams" (八步半喜怒哀樂). In August 2018, the Group completedthe acquisition of Houhai Culture and consolidated its accounts for the firsttime. Houhai Culture recorded revenue from the broadcast of the variety show"Give Me Five Season II" (高能少年團第二季) and the copyright and adaptationof the manga "Hikaru no Go" (棋魂), thereby contributed to theoverall performance of the Group.


Film Exhibition

Film exhibition was another keyrevenue driver for the Group. During the Review Period, the Group operated fivecinemas at different strategic locations in Hong Kong, including Mong Kok, ChaiWan, Causeway Bay and Tsuen Wan. Benefiting from the five cinemas in fulloperation, the film exhibition business segment recorded revenue amounted toapproximately HK$119.7 million, a significant increase of 30.8% compared with thecorresponding period of last year.


Given the unproven profitability anduncertain financial contributions and prospects of the Group's cinema in ''VivoCity'' (怡豐城) in Shanghai, Mainland China, theGroup completed disposal of the business in July 2018. The net proceeds of HK$17.7million from the disposal will be used to further invest in other businesssegments as part of the resource reallocation of the Group.



During the Review Period, the post-production,advertising, marketing and publication businesses of the Group recorded a totalrevenue of approximately HK$7.0 million, representing a significant increase ofapproximately 106.5% against the last corresponding period. The Group willcontinue to maintain the smaller operation of this business segment and timely reviewits overall business structure and strategies to ensure a synergy effect iscreated on the Group's businesses.



In 2019, the Group has stepped upeffort to develop its artiste and scriptwriters resources and formal contracts havebeen signed with various artiste agencies and two famous scriptwriters, namelyShu Huan (束煥) and Su Biao (蘇彪). In particular, various artisteagencies together with top artistes, including Yang Yang (楊洋), Song Qian (宋茜), Wu Chun (吳尊), Meng Ziyi (孟子義), Liu Yichang (劉奕暢), Li Yitong (李一桐), Zhao Lusi (趙露思), Li Zefeng (李澤鋒) and Ling Meishi (淩美仕) have joined the Group.Meanwhile, agencies of Kan Qingzi (闞清子), Zhao Da (趙達), Shi Shi (施詩), Zhang Xiaoqian (張曉謙), Wang Yi (王藝), Oscar Jiang (江銘亮), Re Yina (熱依娜), Wu Yue (吳月), Chen Jiaxin (陳嘉歆), Ma Mengjia (馬夢嘉), Liang Siyu (梁思雨), Xu Kexin (許可昕), You Lixi (優麗絲), Dai Yu Dan (代雨丹) and Wang Jingyi (王晶怡) will also sign contracts withthe Group. The all-round artiste and scriptwriting teams will provide thegreatest support to the Group in producing high quality TV series andcontribute to its rich pipeline of copyright projects in the future.


Transmit Entertainment is committedto producing quality films and television productions for audience. Regarding thefilm and TV series production and distribution, a number of copyright projectsof the Group are in pre-production stage, including "Hikaru no Go" (棋魂), "Romance of the Youth" (少年江湖物語), "Redemption on the Blade" (刀鋒上的救贖), "Tribes and Empires: Mrs. HuZhu" (九州‧斛珠夫人) and "Persuader" (甲方乙方之勸退師). Moreover, the Group has reachedagreements with some owners of popular copyrights and will develop and produce copyrightedseries of works including "Unnatural" (非自然死亡), "Love Destiny" (天生一對), "Imperial Harem" (後宮‧真煩傳), "Next To The Last Girlfriend" (倒數第二個女朋友), "Turn Red into Green" (看朱成碧), "Nine Knights in Beijing" (京門九俠), "Hear" (聽見風說愛你的聲音) and "Romance in the City" (半城風月), etc. As for variety shows, theGroup intends to broadcast "I Love You, Me Too" (喜歡你,我也是), a proprietary brand-new romancedetective reality show, on the online platform iQIYI and to continue to launchthe third season of "Give Me Five" (高能少年團), a proprietary variety brandwith two seasons broadcasted, while a new gaming variety show "National GameCarnivals" (全民遊戲嘉年華) is now being developed.


Ms Zhao Wenzhu, President and Executive Director of TransmitEntertainment, said, "We are pleased to achievesuch satisfactory results and turned around to profit in the first half of thefiscal year, proving that we are taking our business in the right direction. Wewill continue to explore all kinds of opportunities including for cooperationacross the entire film, television and media industry, chain in the country, capitalizingon the Group's outstanding film production capabilities, with the aim ofstrengthening the Group's income base. Going forward, leveraging thepartnerships forged with famous artistes and their agencies, the Group willgradually expand its artiste agency business, continue to identify high-qualityartistes and simultaneously launch co-branding partnerships, Internet andPan-entertainment products and poverty alleviation and charitable products. TheGroup will work hard on diversifying its operation, enhancing its profitabilityand generating satisfactory returns for shareholders."

About Transmit Entertainment Limited (stock code:1326)

Transmit Entertainment is a media and entertainment company with a diverse portfolio. The Group principally engages in film and TV series production and distribution and licensing of film rights, film exhibition and other businesses. The Group mainly produces Chinese films, variety shows and TV series in both Mainland China and Hong Kong. It also operates five Hong Kong based cinemas and one post-production company. Its subsidiary Houhai Culture has a professional film and television production team particularly adept in producing variety shows and television drama series, from screenwriting, shooting, post-production to distribution and marketing. It also owns copyrights to a large number of television drama series and has been closely cooperating with top-tier broadcast networks and online streaming platforms.