I am delighted to announce that for the third consecutive years since the Group went public in June 2004, we have recorded an annual net profit growth of over 26%. This year, we record a growth in profit of 67% compare to the previous year. This outstanding achievement has been driven by the concerted efforts of our staff in conjunction with China’s open economic policies. Benefiting from China’s open-door strategy and entry into the World Trade Organisation ("WTO") which result in the opening of the advertising market, the Group was successful in obtaining an advertising operation permit from authorities in China and established Qin Jia Yuan (China) Advertising Company Limited in Shenzhen this year. This enabled the Group to put advertising business development in high gear. The Group’s unique advertising operations model in providing comprehensive one-stop TV media services has brought us results surpassing expectations.

As a result of China’s strong economy, the growing demand for a better living and enhancement in the quality of TV programs, advertising expenditure on TV media in China has seen a strong growth of 20% annually over the last three years. This makes China one of the countries in the world with a sustaining high growth rate in advertising expenditure. The Group’s advertising business primarily focused on the TV advertising market with a total annual advertising expenditures of over RMB 300 billion a year. Not contented with the fixed commission rate administrated by the traditional system adopted by many advertising companies, the Group focuses on the acquisition of exclusive advertising agency rights from TV channels. The results of our advertising operation are largely determined by viewing rate of TV stations, while TV stations’ income depends on advertisement, and as such, the Group and TV stations are perfect partners. In other words, the rising TV ratings and viewership of TV stations in China will result in a surge of advertising placements which, in turn, will directly benefit the Group’s total revenue.

During the year, the Group hired talents with extensive experience in China’s advertising market, including professionals in advertising sales, operations and planning, and TV program packaging and promotion. Thus the Group is capable of providing professional and world-class advertising planning services to the mainland TV stations in partnership with us as well as attracting international advertising clients. With such a team and the close cooperative relationship with our partners, we believe that we will create a win-win situation for TV stations, advertisers and sponsors, viewers and the Group.

With government’s encouragement of the production of good quality TV programs in the mainland and the implementation of the Closer Economic Partnership Arrangement (CEPA) for Hong Kong, the Group, as a TV content provider in Hong Kong, is enjoying the benefits. During the year under review, the TV drama series jointly produced by the Group and nine major mainland TV stations have been completed as scheduled. The series are of high quality and will provide the Group with a source of stable income.

The Group has adopted a dual-core development strategy, which is to build the TV advertising business platform and to become a leading TV drama provider. Leveraging on China’s strong economy and the great efforts of the Board of Directors, the staff, and local and overseas business partners and advertisers, we are confident that the Group will make remarkable headway in the future.

On behalf of the Board of Directors, I would like to express my heartfelt thanks to the mainland TV stations for their long-term collaboration with us, our strategic partners in overseas distribution markets, advertising clients and our staff.

Wong Yu Hong, Philip
Chairman