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Public company info - China 33 Media Group Ltd. , 08087.HK

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China 33 Media Group Ltd., 08087.HK - Company Profile
Chairman RUAN Deqing
Share Issued (share) 4,294,967,295
Par Currency U.S. Dollar
Par Value 0.001
Industry Advertising
Corporate Profile Business Summary: The Group was principally engaged in the sale of advertising spaces in magazines distributed in certain train services in the PRC;sale of outdoor advertising spaces, mainly in the form of light boxes, at certain airport towers and certain railway stations in the PRC;and film investment for profit sharing on box office of movies and distribution income of television drama in the PRC. Performance for the year: The Group’s revenue for the Year amounted to approximately RMB57,494,000, representing a decrease of approximately RMB34,715,000 or 37.6% as compared to that of approximately RMB92,209,000 for last year, which include RMB89,309,000 from continuing operations and RMB2,900,000 from discontinued operations of money lending business. Business Review: Printed Media Advertising Revenue from printed media advertising was the main source of revenue for the Year, representing approximately 89.5% thereof. It is expected that printed media advertising income would drop due to the down sizing of the business, but would remain as one of the dominate income for the Group in the future. Revenue from printed media advertising mainly represented the amount generated from the sales of the advertising space on the periodicals operated by the Group and was recognised upon the publication of the periodicals in which the respective advertisement was published. “ 旅伴” (Fellow Traveller) is a monthly nationwide periodicals distributed on China Railway High-speed (“CRH”) trains and selected regular trains in the PRC. Revenue from “ 旅伴” (Fellow Traveller) was the major source of revenue for the Year which contributed approximately 82.8% of the Group’s total revenue from printed media advertising. The significant decrease was mainly due to decrease in number of customers for periodical “旅伴” (Fellow Traveller) and “ 都市生活” (City Life), as the Group’s coverage for trains with placing right was reduced due to high operating cost. Outdoor Advertising Revenue from outdoor advertising represented the advertising income generated from the sales of advertising spaces on the billboards and LEDs installed at certain selected train stations. The significant drop in revenue was mainly due to immaterial revenue generated from station campaigns when compared to last year. Film and Entertainment Investment Revenue from film and entertainment investment represents profit sharing on box office of movies and concerts and distribution income of film rights and television drama. The Group expects will start generating revenue from this new segment from next year with launch of movies and other entertainment projects. Prepaid Card The Group obtained the Stored Value Facilities License (“SVF License”) in November 2016, and started generating income from the new business in 2016. Revenue from prepaid card mainly represent the transaction fees recognised when the prepaid cardholders made payments of fares using the prepaid card and the card related fees when the service is provided. Money Lending Interest Income from Discontinued Operation Revenue from money lending business represented interest income from provision of mortgage loans and short-term loans in Hong Kong. Revenue from money lending business was approximately RMB2,900,000 for the last year. Since the management of the Group decided to concentrate on the resources of the Group on the business of printed media advertising and new segment of film investment, on 16 September 2015, the Group disposed of the entire equity interest in 33 Consultants Services Limited which engaged in money lending business to two independent third parties. Accordingly, the Group’s money lending operation was discontinued last year. During the Year, the segment results of printed media advertising recorded a segment profit of approximately RMB19,033,000, representing a decrease of approximately 35.7% as compared to that of approximately RMB29,612,000 for last year. The decrease in segment profit was mainly due to less revenue generated while the Group still needs to bear fixed cost for magazine placing rights at first quarter of 2016 before the relevant contracts expired. Segment results of outdoor advertising recorded a segment loss of approximately RMB6,861,000 for the Year, while it was approximately RMB8,955,000 for last year. The improvement in segment result was contributed by early termination of all the advertising agency agreements with expiry dates in mid-2015 with the local PRC railway authorities for the outdoor advertising spaces at various railway stations in the PRC, thus the monthly fixed advertising agency fee payment was highly reduced. By late 2015, the Group started to engage in a new operating segment, film and entertainment investment in the PRC, as the films have not yet launched by the Year end, thus there was no profit sharing on box office of movies and distribution income of film rights and television drama. By late 2016, the Group obtained SVF License, and started generating income from prepaid card. However, as a start-up business, lots of expenses were incurred on professional team, network system and regulation compliance, resulting a relatively large segment loss. Prospects: The cultural and media industry throughout the world, and especially in the People’s Republic of China (the “PRC”) is presented with a huge opportunity. China has become the world’s second largest film market country. With mature online and offline entertainment platforms, PRC’s content demand is soaring in a historical rate. In 2016 and 2015, the total box office in PRC is RMB45.7 billions and RMB44 billions respectively. PRC movie attendance reached 1.3 billion in 2016. The Group are committed to delivering quality entertainment content. The Group select, evaluate and produce good film and TV projects. The Group also pursue the opportunity to co-invest in various film projects led by other studios. During the reporting period the Group started to produce 11 movies, which most of them are in line to broadcast in 2017. In 2016, Hong Kong’s economic growth moderated to 1.9% in real terms. The growth of private consumption expenditure slowed to 1.6% (from 4.8% for 2015). However, the alternative payment industry thrived in 2016 and is gaining place in Hong Kong payment market. Apple Pay, Samsung Pay and Android Pay have entered the mobile payment market. WeChat Pay and Alipay are ready to compete and capture the share. On the stored value facilities side, in addition to the local market leaders of HKT and Octopus, other players from Mainland (eg Transforex, ePayLinks) have also entered the market. With the growing number of players in the industry, the Hong Kong Monetary Authority launched the Payment Systems and Stored Value Facilities Ordinance to enforce supervision of the players which could help strengthen public confidence in using SVF products and services as well as facilitate developments and innovations in the local retail payment industry. SVF licence were granted to 13 companies in 2016. The licensees are with diverse backgrounds, including industry giants, mainland companies and local players offering various products, including eWallet, mobile payment and prepaid card. 2016 is a year of fast-growing development for alternative payment methods in Hong Kong. In 2017, players would strive to establish a sold foothold in this highly competitive market. Despite the keen competition, the Group believe there’re ample opportunities and the Group will provide products and services with creativity and innovative value to win and gain in the market so as to contribute to the Group’s sustainable growth. For the printed media business, in view that (i) the traditional printed media business has been decreasing since the year ended 31 December 2014; and (ii) the gradual shift of business focus from traditional media to new media opportunities in order to diversify the Group’s existing businesses, the Group decided not to proceed with the distribution of the printed periodical business following the expiry of the then cooperation agreement on 31 December 2016.

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