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 (the "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.
MANAGEMENT DISCUSSION AND ANALYSIS OPERATION REVIEWThe Company and its subsidiaries (collectively referred to as the "Group") reported a total revenue of approximately HK$80.9 million for the six months ended 31 December 2015 (the "Six-month Period"), compared with approximately HK$55.2 million for the corresponding period in 2014. For the Six-month Period, a loss attributable to owners of the Company of approximately HK$15.6 million was recorded whilst in the corresponding period of last year, a loss attributable to owners of the Company of approximately HK$11.4 million was recorded.
During the Six-month Period, artist management's segment contributed a revenue of approximately HK$29.1 million (2014: HK$42.2 million). The revenue from the business segment of film and television programme production, distribution and licensing was approximately HK$33.5 million (2014: HK$8.2 million). The revenue from cinema operation segment was approximately HK$14.3 million (2014: HK$3.4 million). The revenue from the money lending business was approximately HK$4 million (2014: HK$1.4 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 intended 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 was signed and finalized as at the date of this announcement.
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 was signed and finalized as at the date of this announcement.
Possible Subscription and Possible Acquisition
On 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 was signed and finalized as at the date of this announcement.
Acquisition
On 14 December 2015, the Company entered into a Sale and Purchase Agreement with Mr. Stephen Chau ("Mr. Chau"), the shareholder of the Starz Holdings Limited (the "Target Company"), pursuant to the Company acquired and Mr. Chau disposed its shares, representing 40% of the issued share capital of the Target Company (the "Acquisition"). The payment methods of the consideration will be (i) HK$6,600,000 payable in cash plus the adjustment amount; 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. Details of the Acquisition were disclosed in the circular dated 18 January 2016.
The shareholders approved the Acquisition on special general meeting on 2 February 2016.
Taking into account the stable interest income stream and the prospects of the money lending business, the Group intends to expand its money lending business, which is principally the provision of mortgage loans and personal loans for customers with good credit record in Hong Kong. The Board is optimistic to the future prospects of this business segment in view of the existing operation and developments.
As at 31 December 2015, total borrowing of the Group (excluding payables) amounted to approximately HK$84.5 million (30 June 2015: HK$68.1 million). During the Six- month Period, the Group's gearing ratio (expressed as a percentage of total borrowing over total assets) was 13.5% (30 June 2015: 16.2%).
In addition to its share capital and reserves, the Group also made use of cash flow generated from operations and the borrowings, mainly including convertible bond, promissory note payable and short term loans, to finance its operation. The promissory note payable is denominated in Hong Kong dollars, unsecured, interest-free and has a fixed repayment term. Other than disclosed above, the Group has no other external borrowings. The Group's bank and cash held in hand were mainly denominated in Hong Kong dollars. The Group managed its foreign exchange risk by closely monitoring the movement of the foreign currency rates. The management conducted periodical review of foreign currency exposure and would take appropriate measures to mitigate the risk should the need arise. The Group experienced no significant exposure to foreign exchange rate fluctuation during the Six-month Period.
China 3D Digital Entertainment Ltd. issued this content on 05 February 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 05 February 2016 13:53:29 UTC
Original Document: http://www.china3d8078.com/images/cms/494018380.pdf
