Mei Ah returns to profit at HK$52mln

Television arm's revenue increased to approximately HK$104.1mln, representing 68% of the Group’s turnover.

Mei Ah Entertainment Group Limited (“Mei Ah” or the “Group”) on Tuesday announced its final results for the year ended 31st March 2010.

During the year under review, with the TV operations reporting satisfactory growth, the Group recorded a consolidated turnover of HK$153.4 million (2009: HK$191.6 million) and profit attributable to equity holders of the Company of HK$52.0 million (2009: loss of HK$71.5 million). Benefitting from the market rebound during the year, the Group recorded fair value gains on financial assets at fair value through profit or loss and investment properties amounting to approximately HK$21.5 million and HK$22.5 million respectively (2009: loss of HK$14.8 million and HK$11.3 million respectively). Basic earnings per share were HK1.06 cents (2009: loss per share HK1.46 cents).

Mr. Li Kuo Hsing, Founder and Chairman of Mei Ah Entertainment, said, “I am pleased to report that Mei Ah has delivered satisfactory results during the year under review. In the past years, we have focused on developing our TV business. Our efforts have begun to bear fruit as reflected in our return to profit during the year. We have cemented our foundation for pursuing long-term development.”

The contribution of revenues from the Group’s television segment has increased to approximately HK$104.1 million (2009: HK$84.5 million), representing approximately 68% (2009: 44%) of the Group’s turnover. As at 31st March 2010, the Group provided three channels to now TV in Hong Kong and a movie channel and a drama channel respectively through the network of SingTel in Singapore. The full year effect of the Singapore drama channel contributed the increase in segmental revenue during the year.

In September 2008, the Group penetrated into the Japan market through the acquisition of a channel supply company in Japan which broadcast through the platform of Sky PerfecTV in Japan. In October 2009, that channel became one of the basic package channels of Sky PerfecTV and since then has been exposed to its wide subscriber population. In November 2009, the Group entered into an agreement with HBO to provide content including films and drama through the launch of “Red Channel” in different territories by stages. This co-operation has enhanced the Group’s exposure to the global entertainment market and also helped the Group to establish its channel brandname.

The contribution of revenues from the Group’s segment encompassing film exhibition and film rights licensing and sub-licensing decreased from HK$62.8 million to HK$10.8 million which is mainly attributable to the release of “Red Cliff” which contributed significant theatrical release revenue to the Group last year. Since 2007, the Group has been appointed as the exclusive distribution agent to market and license films produced by BIG Pictures Limited (“BIG”), a film production house. The Group also supports BIG’s content requirements in respect to the Group’s television, licensing and distribution operations by acquiring those relevant film rights, and an advantage from the synergy in respect to the
collaboration between BIG’s film library and the Group’s distribution network..

The revenues attributable to sale and distribution of films and programs in audio visual product format decreased from HK$44,233,000 to HK$38,387,000, which is mainly caused by the overall industrial climate and fewer new titles being released during the year. Since April 2008, the Group has widened its network and sources of audio visual products distribution by distributing titles for an international entertainment and media company. The Group will continue to acquire customised and popular films and diversify its distribution channels in order to maintain its competitiveness.

Looking forward, in view of the Group’s TV business, Mei Ah will continue to develop and launch more channels with increasing variety to different regions and explore securing advertising income from available air-time on those TV channels. In addition, the Group will look for partnership opportunities like co-operation with other cable TV and internet TV operators in Japan.

The Group will continue to strengthen its film library through acquisition, and its own production and co-production. Equipped with its own film library and through its experience and network in program sourcing, the Group is confident that it will continue to provide high quality and customised TV programs to its audiences. The Group also believes that its television segment has huge potential for growth and will continue to bring a significant and increasing contribution to the Group’s results.

Following the increasing popularity of pay TV in Hong Kong and digitalisation of TV signal in Hong Kong and China which allowing more broadcasting channels than the analog system, the demand for TV content is expected to increase significantly and the Group believes that it will enjoy encouraging results and fruitful rewards from these new market opportunities.

Mr. Li concluded, “Apart from growing our TV business, we will also support Hong Kong’s film industry by investing in high quality and popular films. Moreover, the Group will explore opportunities to enter into China’s cinema theatrical market and several projects are in the pipeline. Yet, we will prudently assess available options with the best interest of shareholders in mind.”