Leverages Outstanding Production Capability Actively Explores Development Opportunities in Film, Television and Media Industry

HONGKONG, CHINA - Media OutReach - 25 September2019 - Transmit Entertainment Limited ("Transmit Entertainment" or the "Company",together with its subsidiaries, the "Group"; stock code: 1326) today announcedits audited annual results for the year ended 30 June 2019 (the "Review Year").

During the Review Year, the Group recordedsatisfactory results, with revenue increased significantly by 143.3%year-on-year to HK$668.1 million. Gross profit also climbed, rising by 89.5% toHK$262.3 million, with gross profit margin at approximately 39.3%. Benefiting from profit contributions from Houhai Culture andrevenue growth from the production and distribution of the films "L Storm" (L風暴) and "The Invincible Dragon" (九龍不敗), loss attributable to owners of the Company forthe Review Year reduced significantly by 81.3% from approximately HK$189.9million in 2018 to approximately HK$35.5 million. The Group's financial positionremained solid as at 30 June 2019, with the Group's bank balances and cashamounting to approximately HK$122.0 million.

Business Review

Film and TV SeriesProduction and Distribution

During the Review Year, thefilm and TV series production and distribution business remained the corebusiness of the Group with revenue of approximately HK$415.2 million reported,representing a significant increase of approximately 900.6% as compared withthe last year. During the ReviewYear, the Group released three films, namely "L Storm" (L風暴), "The Invincible Dragon" (九龍不敗) and "Lucid Dreams" (八步半喜怒哀樂), while two films were also releasedlast year, namely "Love Forever" (我們遇見松花湖) and "Tomorrow IsAnother Day" (黃金花), in addition to a sharingof worldwide box office receipts of "S Storm" (S風暴). In August 2018, the Group completed theacquisition of Houhai Culture and consolidated its accounts for the first time.On top of the revenue generated from the broadcast of its variety show "Give MeFive Season II" (高能少年團第二季) and the copyright andadaptation of manga "Hikaru no Go" (棋魂) during the Review Year,revenue from the broadcast of the internet drama "Romance of the Youth" (少年江湖物語) was also recorded, thus deliveringnotable contributions to the Group's results. As for the romantic detectivereality show developed and produced by the Group, namely "I Love You, Me Too" (喜歡你，我也是), has also been broadcasted onthe online video platform iQIYI and continuedto attract widespread attention and discussion from netizens. 

Film Exhibition

Film exhibition was another key revenue driver for theGroup. During the Review Year, the Group operated five cinemas thatare strategically located across Hong Kong, including Mong Kok, Chai Wan,Causeway Bay and Tsuen Wan. Benefiting from the full operation of the fivecinemas, revenue from the film exhibition segment steadily increased, rising byapproximately 8.8% to approximately HK$243.6 million as compared with last year.

During the Review Year, theGroup completed the disposal of a cinema located at "Vivo City" (怡豐城), Shanghai, Mainland China and recorded net proceeds of HK$21.7 million from the disposal,which will be used to further invest in other business segments as part of theresource reallocation of the Group.

Others

The total revenue from the Group's post-production,advertising, marketing and publication businesses increased to approximatelyHK$9.4 million in the Review Year. Taking into account the small-scaleoperation of the post-production business of the Group in recent years, currentmarket trends and change in the Group's overall business strategy, the Grouphas disposed of the post-production business during the Review Year.

In addition, in order to achievelong-term sustainable development, the Group has formed cooperative relationswith various artists, internet celebrities, agencies, renowned scriptwritersand popular directors to make in-depth development in the film and television industryduring the Review Year. The Group has also nurtured new celebrities anddeveloped the Multi-Channel Network (MCN) business with vast resources relatedto films and televisions on different broadcast platforms and websites andexpanded its revenue base through the building of a self-developed consumerbrand. These moves will facilitate the Group's implementation of its branddiversification development strategy and strengthen its content creation capabilityand ultimately raise its brand awareness in the industry.

On 10 September 2019, the Groupannounced that it will acquire 60% equity interest of Wenlan (Shanghai)Cultural Communication Co., Ltd. ("Wenlan Cultural") for an aggregateconsideration of RMB96,000,000. Wenlan Cultural is a professional teamprincipally engaged in the planning of culture and entertainment, theperformance agent and the training for music bands businesses. Ms. Yang Chaoyue^(楊超越) is the key member of the musicband group under its management named, CH2 Girls Group. Ms. Yang debuted as amember of Rocket Girls 101^ (火箭少女101) after attending Tencent'sgirl group talent show Produce 101^ (創造101) and was named by Artiste ofthe Year 2018^ (「影響中國2018年度演藝人物」).The management of the Group believesthat the acquisition will enable the Group to extend its footprint to China'sbooming popular idol group industry and to obtain the commercial performanceslicense^ (營業性演出許可證) held by Wenlan Cultural, atthe same time greatly enhancing the Group's business value and brand influence.

Prospects

Looking ahead, the Group will focuson realizing its brand diversification development strategy and actively buildand promote its self-owned consumer brand to broaden its revenue base through thecelebrity market and further expand its presence in the pan-entertainment sector.Meanwhile, more celebrities will be invited to join the Group and the newbusiness is expected to generate sustainable synergies with the Group'sexisting film, television and variety show resources, thereby creating tremendousroom for the Group's development in the pan-entertainment consumption sector.

In addition, the Group is committedto enhancing its content creation capability and producing quality programs foraudiences. With regard to film and TV series production and distribution, anumber of copyright projects are in the pre-production stage, including "Redemptionon the Blade" (刀鋒上的救贖), "Mrs. Hu Zhu" (斛珠夫人), "BeAn Influencer" (我是帶貨官) and "JiaFang Yi Fang Zhi Wei Qing Shi" (甲方乙方之維情師). Moreover,the Group has reached agreements with certain owners of popular copyrights andwill develop and produce a number of series, including "Locard's Theory" (洛卡爾定律), "LoveDestiny" (愛有天意), "ImperialHarem" (後宮‧真煩傳), "NextTo The Last Girlfriend" (倒數第二個女朋友), "Romance inthe City" (半城風月), "TurnRed into Green" (看朱成碧), "The Flower Throne" (鮮花寶座) and "HerWarfare" (蘇筱的戰爭). Asfor variety shows, the romantic detective reality show developed and producedby the Group, namely "I Love You, Me Too" (喜歡你，我也是), completedairing on 26 June 2019, and in view of the outstanding performance andpopularity of the show's first season, the Group is considering to produce a secondseason in order to create a self-developed, multi-season variety show brand.Besides, the Group will launch the third season of "Give Me Five" (高能少年團), afollow-up to the previous two seasons. "National Game Carnivals" (全民遊戲嘉年華), anew gaming variety show, is also under development.

Ms. Zhao Wenzhu, President and ExecutiveDirector of Transmit Entertainment,said, "We are pleased to see the Group continue performing satisfactorily. Wewill further explore development opportunities in the film, television andmedia industry, while leveraging our outstanding film production capabilitiesfor support. In particular, we will seek opportunities for cooperation in theupstream and downstream segments of the industry chain, with the aim to strengthenthe Group's revenue base. Going forward, we will leverage partnerships forgedwith famous artistes and their agencies to develop a self-owned brand,gradually expand the scale of film and television intellectual property derivedproducts and the e-commerce business so as to diversify our business, enhance profitabilityand generate satisfactory returns for shareholders."

About Transmit Entertainment Limited (stock code：1326)

Transmit Entertainment Limited isa fully-integrated media and entertainment company and also a unicorn media groupthat can empower the consumer industry. It principally engages in diversifiedculture-related businesses including (i) film and TV series production anddistribution; (ii) film exhibition; (iii) other businesses (including screenwritingand film direction, internet celebrities and artiste agency, andpan-entertainment businesses along the value chain). The Group produces Chinesefilms, variety shows and TV series in both Mainland China and Hong Kong, aswell as engages in other pan-entertainment businesses. Houhai Culture (awholly-owned subsidiary of the Group newly acquired in August 2018) has aprofessional film and television production team which mainly focuses onvariety shows and TV series. It specializes in content production,scriptwriting, shooting, post-production, distribution and marketing. It alsoowns a substantial amount of copyrights of various TV series and has beenclosely cooperating with tier-one broadcast networks and tier-one onlinestreaming platforms.

Striving to expand the pan-entertainmentbusiness, the Group has entered into formal contracts with various artisteagencies and managers, to add to its talent pool and enhance its competitiveedge and reputation in the film and television industry across the GreaterChina region in January 2019. Meanwhile, the Group has also duly entered into contracts with a renownedscriptwriter Li Xiaoming (李小明) and new popular filmdirector Wu Qiang (吳強) in June the same year tofurther improve the strength in content creation of the Group to build acomprehensive film and television entertainment and culture empire.