6 months ended 30 June
Gross Profit Margin
Profit for the period attributable to owner of the Company
Earnings per share (basic)(HK cents)
The Board does not recommend interim dividend for the 6 months ended
During the reporting period, the Group's operating revenue increased 38% to approximately HK875 million (6 months ended30 Jun 2013:
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:
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,
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.
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.
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