SMI Holdings Announces 2015 Interim Results

SMI Holdings Announces 2015 Interim Results

Profit increased 56.2% to approximately HK$189 million

HONG KONG, Aug. 31, 2015 /PRNewswire/ --

Highlight


-- Revenue increased 62.3% to approximately HK$1,420 million
-- Xingmeihui has shown steady growth. The segment has recorded revenue of
approximately HK$130 million, grew by 14.0%.
-- As Baidu has subscribed share of the Company, both sides will deepen
their cooperation in business like Co-branded Card and online ticketing
etc. It will help to increase cinema admission of the Company and create
"Two Kilometers Ecosystem." Baidu will continue to increase its
shareholding in the future.
-- Increased 40 movie theaters during the reporting period. As at 30 June
2015, total number of movie theater is 130 and is expected to reach 200
by the end of 2015.
-- Profit for the period increased 56.2% to approximately HK$189 million.
-- Profit attributable to owners of the Company increased 89.2% to
approximately HK$191 million.
Financial Highlight



For the Period ended 30
Jun

HK$'000 2015 2014 Change
------- ---- ---- ------

Revenue 1,419,784 874,641 +62.3%

Gross Profit 861,897 564,349 +52.7%

Gross Profit Margin 61.0% 64.5%

Profit for the period 188,647 121,091 56.2%

Profit for the period
attributable to owners of
the Company 191,054 101,004 +89.2%

Earnings per share
(basic)(HK cents) 1.82 1.13 +61.1%
SMI Holdings Group Limited (HKSE stock code: 198, the "Company" or "SMI") and its subsidiaries (collectively the "Group") announced its results and financial position for the six month ended 30 June 2015. During the reporting period, the Group's revenue increased 62.3% to approximately HK$1,420 million (corresponding period of 2014: HK$875 million) and profit attributable to owners of the Company increased 89.2% to approximately HK$191 million (corresponding period of 2014: HK$101 million).

Business Review

Movie Theater Business

Together with the flourishing industry, the Group reported a striking accomplishment with its movie theater business in the first half of 2015. Compared with the same period in 2014, the revenue from this segment increased 64.1% to approximately HK$1,249 million. Gross profit was HK$795 million (corresponding period of 2014: HK$541 million) and gross profit margin attained 63.7% (corresponding period of 2014: 71%).

As at 30 June 2015, the Group had 130 movie theaters with 1,000 screens in major cites across China, representing an increase of 44.4% and 42.9% respectively compared with that as at 31 December 2014. During the reporting period, the Group not only retained its leading position in first tier cities, but also accentuated to realize the remarkable potential of movie theater development in second and third tier cities. The Group aims to increase its number of theaters countrywide to 200 by the end of 2015.

Advertising and Promotion Business

During the Reporting Period, the Group's advertising and promotion business expanded to a nationwide network to get in line with the rapid growth of the movie theater business coverage of all major first tier cities and fast-growing second and third cities in China. Other than the Group's plan for space and idle time of the movie theaters, screening halls and projection screens in application for full utilization, the Group also launched interactive marketing campaign in order to sustain the growth of this business. On the other side, auto shows in the movie theater lobby and naming rights of large screening halls as the Group's innovative promotion methods were initiated to diversify advertising channels. The Group will bring about its advertising and promotion strategies, based on its nationwide theater network, so as to maximize clients' satisfaction and attract more potential clients for the Group.

Membership Integrated Scheme ("New Membership Scheme")

Since the introduction of the New Membership Scheme, with the establishment of a well-rounded customer database, the Group has effectively retained customer base while exploring new customers, and laid a solid groundwork for the sustainability of the Group's core business (movie theater business) and complementary business (Xingmeihui). The Group thoroughly exploited the accessible business opportunities brought by the substantial audience and those in the vicinity of its movie theaters by offering a variety of contents and appropriating different channels. Through the use of movie theater advertising, on-site events and celebrity exposure, together with the Online to Offline ("O2O") sales model, SMI grew into the most valuable and energetic platform for brand operators and service providers in China.

During the reporting period, the New Membership Scheme was highly successful in expanding the membership database for the Group, and strengthened the Group's core and complementary businesses.

Xingmeihui

Xingmeihui was the first O2O e-shop based on movie theater channels in China. During the Reporting Period, the Group had focus to develop the complementary business by leveraging on the nationwide chain theater network, and riding on the O2O Xingmeihui community digital e-shop. Xingmeihui penetrated the surrounding communities of the Cineplex network, it established in first and second tier cities and economically developed regions, and started to enter third and fourth tier cities. Xingmeihui was established in-theater zones and community shops were established outside theaters.

During the reporting period, compared with the corresponding period in 2014, Xingmeihui recorded a revenue of approximately HK$130 million, and a profit of approximately HK$2,800 million.The Group predicts that Xingmeihui would continue to deliver steady and substantial contribution to the Group. Moreover, as Baidu has subscribed share of the Company, both sides will deepen their cooperation in business like Co-branded Card and online ticketing, etc. It will help to increase cinema admission of the Company and create "Two Kilometers Ecosystem." Baidu will continue to increase its shareholding in the future.

Prospects

The Group expects that there is still a tremendous room for the movie industry in China to grow even though it has already been developing rapidly. In order to maximize shareholders' value, the Group will continue with consolidation of its existing businesses and capitalize its strong nationwide theater network for exploitation of new business in the future.

About SMI Holdings Group Limited (0198.HK)

SMI Holdings Group Limited (0198.HK) is a company listed on the Main Board of the Stock Exchange of Hong Kong. The Company is principally engaged in the business of movie theater operating and new complementary business, such as Xingmeihui and advertising & promotion business. Under its strong management team and powerful business network, the number of SMI's movie theater has grown from 3 in 2009 to 130 as at 30 June 2015.

SOURCE SMI Holdings Group Limited

SMI Holdings Group Limited

CONTACT: Stimulus Investor Relations, Casey Tang, +852-9200-3513, casey.tang@stimulus-ir.com; Hill Ho, +852-6505-1569, hill.ho@stimulus-ir.com


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