SMI Announces 2014 Interim Results

SMI Announces 2014 Interim Results

HONG KONG, Aug. 29, 2014 /PRNewswire/ --

Financial Highlight

6 months ended 30 June

HK$'000

2014

2013

Change

Turnover

874,641

649,097

+34.7%

Revenue

874,641

632,671

+38.2%

Gross Profit

564,349

343,289

+64.4%

Gross Profit Margin

64.5%

54.3%

+10.2p.p.

Profit for the period attributable to owner of the Company

101,004

69,961

+44.4%

Earnings per share (basic)(HK cents)

1.13

0.86

31.4%

SMI Corporate Limited (HKSE stock code: 198, the "Company" or "SMI") and its subsidiaries (collectively the "Group") announced its results and financial position for the 6 months ended30 June 2014. During the reporting period, the turnover of the Group increased 34.7% to approximatedlyHK$874.6 million (6 months ended30 June 2013: HK$649.1 million). Profit for the period attributable to owner of the Company increased 44.4% to approximatelyHK$101.0 million (6 months ended30 June 2013: HK$70.0 million).

The Board does not recommend interim dividend for the 6 months ended 30 June 2014.  

During the reporting period, the Group's operating revenue increased 38% to approximately HK875 million (6 months ended30 Jun 2013: HK$633 million). The revenue contributed from Xingmeihui surged by 4.4 times to approximatelyHK$114. Gross profit margin significantly increased 10.2 percentage point to 64.5% as compared with the corresponding period in 2013.

Business Review

Movie Theater Business

Benefited from the flourishing Chinese film industry, the movie theater business of SMI developed healthily. For the first half of 2014, the movie theater business has generated revenue of approximatelyHK$761 million, representing an increase of 46% as compared to the corresponding period of last year, while the profit increased by 217% to approximatelyHK$168 million (6 months ended30 June 2013: HK$53 million).

During the reporting period, the Group has a total of 83 movie theaters with 582 screens in major cities inChina, representing an increase of 22% and 19% respectively. (6 months ended30 June 2013: 68 movie theaters; 490 screens) While securing its leading position in first tier cities, SMI expanded its movie theatres footprints to second and third tier cities and has opend 15 new movie theaters in the first half of 2014 inXi'an, Wuxi and other cities. The Group expects to have 100 SMI movie theaters nationwide by the end of 2014.

Advertising and Promotion Business

During the reporting period, the Group achieved a great leap forward in its advertising and promotion business, and recorded a revenue of approximatelyHK$188 million, representing an increase of 141% compared to the corresponding period of last year. With the objective to satisfy the different advertising needs of customers, the Group has rationalized the arrangement of the idle time and space of movie theaters, screening halls and projection screens, and utilizing advanced facilities like LED panels to develop its advertising and promotion business on an on-going basis.

New Membership Intergrated Marketing Scheme ("New Membership Scheme")

The New Membership Scheme has helped SMI to get a systematic understanding of customers' needs, secure existing customers and develop new customers, as well as build up a complete customer database. During the Reporting Period, the Group continued to push the New Membership Scheme forward and bring it into full play, and has further expanded the Group's membership database and secured the future development of the Group's core business and complementary business.

Movie and TV series production Business

As a strategic move, the Group has gradually transferring its movie and TV series production business to SMI Culture Group Holdings Limited (stock code: 2366), another listing vehicle of the Group, since the beginning of 2014. In the future, SMI Culture will focus on developing contents production business. At present, the Company held 29.97% of the issued share capital of SMI Culture.

New Complementary Businesses -- Xingmeihui

SMI established Xingmeihui in 2012, which is the first-ever movie theater O2O eShop inChina. After two years of planning and development, Xingmeihui has experienced a super-strong growth during the Reporting Period. The segment achieved a revenue of approximatelyHK$114 million, increased significantly by 443% as compared with the corresponding period in 2013, and recorded a profit of approximatelyHK$10 million, representing a huge increase by 1,100% as compared with the corresponding period in 2013.

Xingmeihui has grown strong to become the new engine for the Group's development, and is expected to bring stable and strong contribution to us in the future. As at30 June 2014, the Group has a total of 83 Xingmeihui in-theater counters, and will set relevant stores beyond the Group's movie theaters, which will mostly be located at large social community and crowded shopping malls.

Prospects

The Group will continue expanding its cinema terminal as planned, with an aim to capture the opportunities in area with lower penetration by following our strategy to shift our development focus from first tier cities to second and third tier cities. SMI expects to have 100 movie theaters by the end of 2014, and further increase to 200 theaters in three years' time.

SMI will increase investment in setting up Xingmeihui's channels, and plans to have a total of 200 Xingmeihui stores in 2014, and further increase to 1,000 stores in three years' time. The Group will also cooperate with famous brand on an on-going basis and remain innovative.

Mr. Cheng Chi Chung, Chief Executive Officer of SMI, said: "The film industry inChina has entered into a golden period of growth. In the future, the Group will keep on consolidating its existing businesses and business model innovation, so as to face the opportunities and challenges in the industry. Looking forward, the Group will continue to lead the Chinese culture industry, and to ensure the sustained growth of performance by taking advantage of its powerful platform nationwide, so as to create greater value for shareholders."

To see the full version of this release, click here: http://photos.prnasia.com/prnk/20140829/8521404896-a <http://photos.prnasia.com/prnk/20140829/8521404896-a>

About SMI Corporation Limited (00198.HK)：

SMI Corporation Limited (00198.HK) is a listed company on the main board of The Stock Exchange of Hong Kong Limited ("HKSE"). Cinema operator, film investment and new complementary businesses (Xingmeihui and Advertising and Promotion business) are the principal businesses of the Company. Under the strong management team and powerful business network, the number of SMI cinemas has increased drastically from 3 cinemas in 2009 to 68 cinemas by the end of December of 2013. Mr. ChengChi Chung is the Chief Executive Officer of the Company, who oversees the general direction of the Company and actively involves in cinema and Xingmeihui business. Mr. Cheng is being supported by a competent management team of 8-10 senior executives, who have well experience in relevant fields.



SOURCE SMI Corporation Limited

SMI Corporation Limited


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