According to Dr Anita Leung, the Chief Executive Officer of QJY, the outstanding results for the six months ended 31 March 2006 was mainly attributable to effective cost control measures. The Group continued to recruit professionals and experts in TV programme production management and planning and therefore was able to exercise effective cost control. On the other hand, the Group implemented very strict script review control procedures to enhance the quality of TV drama series. As a result, the Group has consistently increased the participation in the production and distribution of TV drama series which resulted an increase in revenue for all the three main-stream businesses, being TV programme production related, marketing and advertising related, and public relations/sponsorship income. Net profit also grew by 50% compared to the same period last year.
Dr Leung explained: "Breakthrough in return from entertaining and educational TV dramas resulted from increasing demand by mainland audiences." The mainland audiences favour TV drama series of good quality. Script is a more critical factor, rather than the cast, in determining the success of a TV drama. In addition to achieving satisfying results in the TV drama series, Dr Anita Leung also reported that the cooperation with major TV stations in setting up an advertising platform has already achieved effectiveness. With a 25% increase in advertising expenditure in the PRC compared to the corresponding period last year, the Group is expected to enjoy sustainable benefits from the advertising platform in the future.
Dr Leung highlighted the market demand for around 5,000 hours of prime time TV drama series each year, representing RMB100 billion in total advertising expenditure. Breakthroughs and opportunities stand high, underlined by the existing steady growth of TV drama series in the market.
The Group will continue to pursue its strategy to establish long term cooperation agreements with major local TV stations in the PRC and increase its participation in the production, distribution, purchases and sales of quality TV drama series in 2006. At the time of the listing of the Group in 2004, Fujian television station was the only unit working with the Group in the production and distribution of TV dramas. In 2006, the Group is working with six more major local TV stations in the PRC, strengthening the Group's capacity in the production and distribution of TV drama series.
Dr Leung further explained that as the TV media related business of QJY is built on a well founded platform and is operating smoothly, the Group has begun to rolling non-TV media businesses. To this end, the Group has entered into cooperation agreements with more than ten reputable and sizeable national newspaper and magazines, and also radio drama programmes on China National Radio will be launched in the second half of 2006, further contributing to the Group's operating results.
Dr Leung concluded that QJY has various sources of income ranging from script writing, production, purchase and sales of TV drama series, distribution, advertising, sponsorship to public relations. The one-stop services under its unique business model will provide stable growth and opportunities for potential breakthrough for QJY.
About Qin Jia Yuan
Qin Jia Yuan Media Services Company Limited (HKEx: 2366) is a China-focused one-stop shop for TV media services, providing integrated programme, distribution, advertising and marketing and public relations services to production houses, advertising agencies and advertisers. The Group was listed on the main board of the Stock Exchange of Hong Kong on June 30, 2004 following a successful initial public offering. Its strategic shareholders include Aegis Group plc, a public company listed on the London Stock Exchange and one of the world's five largest media groups.