CHINA CREATIVE DIGITAL ENTERTAINMENT LIMITED 中國 3D 數碼娛樂有限公司 *
(Incorporated in Bermuda with limited liability)
(Stock Code: 8078)
Hong Kong Exchanges and Clearing Limited and the Stock Exchange take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.
This announcement, for which the directors ('Directors') of China 3D Digital Entertainment Limited (the 'Company') collectively and individually accept full responsibility, includes particulars given in compliance with the Rules Governing the Listing of Securities on the GEM of the Stock Exchange ('GEM Listing Rules') for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this announcement is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this announcement misleading.
* For identification purposes only
MANAGEMENT DISCUSSION AND ANALYSIS OPERATION REVIEWThe Company and its subsidiaries (collectively referred to as the 'Group') reported a total revenue of approximately HK$26.76 million for the three months ended 30 September 2015 (the 'Three-month Period'), compared with approximately HK$24.7 million for the corresponding period in 2014. For the Three-month Period, a loss attributable to owners of the Company of approximately HK$14.2 million was recorded whilst in the corresponding period of last year, a loss attributable to owners of the Company of approximately HK$2.47 million was recorded.
During the Three-month Period, artist management's segment contributed a revenue of approximately HK$11.66 million (2014: HK$17.56 million). The revenue from the business segment of film and television programme production, distribution and licensing was approximately HK$7.45 million (2014: HK$5.07 million). The revenue from cinema operation segment was approximately HK$7 million (2014: HK$1.67 million). The revenue from the money lending business was approximately HK$0.65 million (2014: HK$0.39 million).
On 19 October 2015, the Company entered into a non-legally binding memorandum of understanding with an independent third party, pursuant to which the Company intends to dispose 51% of the issued share capital of CineUnited Circuits Company Limited ('CineUnited'), an indirect wholly-owned subsidiary of the Company (CineUnited together with its subsidiaries, collectively the 'Target Group') for a total consideration of HK$62,220,000 payable in cash.
The Target Group is principally engaged in the operation of the cinemas located in Xiamen, Guangzhou and Chongqing, PRC. The Investor is an independent third party and not connected with the Company. There is no definitive agreement that has been signed and finalized as at the date of this report.
On 23 October 2015, the Company announced that it will have long-term strategic co- operation with iQIYI Motion Pictures ('iQIYI'), the largest video platform and online movie library which boasts the largest storage of movies in PRC, pursuant to which the Company and iQIYI agreed to co-invest, produce and distribute each movie from now on. There is no definitive agreement that has been signed and finalized as at the date of this report.
Possible Subscription and Possible AcquisitionOn 27 October 2015, the Company entered into a non-legally binding memorandum of understanding with (i) vfxNova Digital Productions Limited (the 'Target Company'), pursuant to the Company intends to subscribe 10% ordinary shares as enlarged by subscription of the Target Company for a consideration of HK$10,000,000 payable in cash (the 'Possible Subscription') and (ii) Mr. Victor Wong ('Mr. Wong'), the shareholder of the Target Company, pursuant to the Company intends to acquire and Mr. Wong intends to dispose its shares, representing 20% of the then issued share capital as enlarged by subscription of the Target Company for a consideration of HK$20,000,000 payable in cash (the 'Possible Acquisition'). After completion of the Possible Subscription and Possible Acquisition, the Company will hold an aggregate 30% of the issued share capital of the Target Company.
The Target Company is one of Asia's most advanced digital visual creation companies which provides full production services from consultancy, filming, animation, visual-effects, 2/3D conversion, post-production and etc. for feature films and TV commercials. The Target Company participated in a number of movies including Rise of the Legend,Cold War, Let the Bullets Fly, From Vegas to Macau, and Hollywood blockbuster films such as Ironman and Diehard 4. The Target Company won numerous industry accolades in the visual effects and digital filming categories in many local and international prestigious film festivals, including the Best Visual Effects in the 34th Hong Kong Film Awards, and major awards in Taiwan Golden Horse Awards and New York Film Festival. There is no definitive agreement that has been signed and finalized as at the date of this report.
On 29 October 2015, the Company entered into a legally binding memorandum of understanding with Mr. Stephen Chau ('Mr. Chau'), the shareholder of the Starz Holdings Limited (the 'Target Company'), pursuant to the Company intends to acquire and Mr. Chau intends to dispose its shares, representing 40% of the issued share capital of the Target Company. The payment methods of the consideration will be (i) HK$6,600,000 payable in cash; and (ii) HK$7,000,000 payable in the form of convertible bond.
The Target Company has numerous famous subsidiaries such as Starz People (HK) Limited and Starz Entertainment Company Limited (The Target Company together with its subsidiaries, collectively called 'Starz'). Starz is one of Asia's most progressive full service modeling and talent agencies. It specializes in promoting fresh faces and outstanding new talent within the fashion and entertainment sectors in Asia and overseas, positioned at the forefront of international model and artiste management. It boasts a highly experienced and dedicated team and also excellent relationships with a vast array of prominent international and local models, artistes, celebrities and professional athletes. Starz credited with diversified ages, types, and nationalities of prominent models and artistes, including Pakho Chau, Shiga Lin and Jeannie Chan and arranged them local and overseas jobs including advertisements, publications, television commercials, fashion exhibits, music videos, image consultations, promotional activities and casting services. There is no definitive agreement that has been signed and finalized as at the date of this report.
During the Three-months Period, the capital structure of the Company was changed as follows:
On 8 September 2015 and 18 September 2015, the Company completed the first tranche placing of 403,000,000 new shares of the Company and the second tranche placing of 397,000,000 new shares of the Company at the placing price of HK$0.25 per placing share respectively. The aggregate net proceeds from the placing amounted to approximately HK$195 million.
On 20 October 2015, the Company was approved to implement the bonus issue of new shares on the basis of three (3) bonus shares for every one (1) Share held. The issued share capital of the Company therefore increased from 958,189,556 shares of HK$0.01 each to 3,832,758,224 shares of HK$0.01 each after completion of bonus issue. The bonus shares have been issued and despatched to the shareholders on 13 November 2015.
Upon the completion of the bonus issue, the bonus shares will be credited as fully paid at par by way of capitalisation of share premium of an amount of HK$28,745,686.68.
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