HONG KONG, March 16, 2015 /PRNewswire/ — The Board of Directors of Pegasus Entertainment Holdings Limited ("Pegasus" or the "Company" and its subsidiaries, together the "Group", stock code: 1326) was pleased to announce on 13 March 2015 that a joint venture company ("JV Company"), which is owned as to 60% by a wholly-owned subsidiary of the Company, entered into a 15-year lease agreement on the same date regarding the leased premises for the Group’s new cinema in Shanghai. This new cinema under the Pegasus brand of "Cinema City" ("Cinema City Shanghai") will be situated on the top two levels of "Vivo City", a large-scale retail complex in the CBD district of Minxing in Shanghai, which is developed by the Mapletree Group of Singapore, with construction expected to complete by first quarter of 2016.
As a condition to the lease agreement, the Company’s subsidiary entered into a guarantee of amount not exceeding RMB5.9 million in favour of the landlord (an independent third party), in respect of the due performance of the JV Company of its payment and other obligations under the lease. At the same time, Lander Investment Limited (an independent third party) who is the other 40% partner of the JV Company, executed an indemnity of amount not exceeding RMB2.4 million in favour of the Group, in respect of any damages incurred by the Group arising from the guarantee in proportion to Lander’s shareholding in the JV Company.
"Vivo City" ,according to its corporate website, is a new landmark in Southwest Shanghai with a GFA of 120,000 sqm, featuring over 280 shops and over 2,600 parking lots, and situated next to 7 office towers. The mall is strategically located above two metro lines with excellent connectivity to the Hongqiao airport and near to five densely populated residential communities. The Directors believe that such large scale development will bring a vibrant and diversified customer stream and attract majority of the district’s traffic to the mall which will directly benefit the cinema business.
Building on the success of the Pegasus flagship cinema in Hong Kong — Cinema City Langham Place, the Company plans to replicate the success of such model to its cinemas in the PRC, by equipping Cinema City Shanghai with the most advanced projection and sound systems, including the exclusive viewing technology "4DX" originated from South Korea, in order to bring a new and unprecedented film viewing experience to PRC top-tier cities like Shanghai. Cinema City Shanghai is expected to possess at least 9 screens with approximately 1400 seats.
Cinema City Langham Place, which officially commenced operation in early January 2015 after renovation, is ranked first in terms of box office income among all cinemas in Hong Kong, according to statistics from Hong Kong Box Office System. For 2015 YTD, Cinema City Langham Place has already screened 48 films with box office revenue reaching approximately HK$20 million. According to statistics from China Box Office website (www.cbooo.cn), Cinema City Langham Place will be ranked third when compared with cinemas in the PRC in terms of box office income, from 2 February to 1 March 2015. Given the high-end cinema business model under the brand of "Cinema City" has been proven successful, this will be a stamp of approval for the Group’s development strategy and growth potential in the film exhibition business going forward.
According to statistics from State Administration of Press, Publication, Radio, Film and Television of the PRC, the total box office revenue in China for 2014 reached RMB29.6 billion, recording a 36.2% year-on-year increase, of which Chinese domestic films contributed 54.5%. The total box office revenue in Shanghai amounted to RMB1.5 billion during January to September 2014, ranking fifth among all provinces and cities in the PRC. In view of the PRC film exhibition market currently undergoing a golden phase of development, Pegasus is confident that by strategically capturing the growth potential of its targeted markets, the Group’s revenue base is expected to expand and thereby potentially generate higher returns for its shareholders.
Mr. Wong Pak Ming, Chairman of Pegasus, says, "The Group is optimistic about the future of the film industry in the PRC market. Our new cinema located in the prime area of Shanghai underscores the Group’s commitment to its expansion plan of cinema operations in the PRC. Cinema City Shanghai not only forms part of our Group’s expansion strategy into film exhibition business, but is also a complementary extension of our existing core business of film production by way of providing an additional and direct film distribution channel in the form of cinema operation. The project of Cinema City Shanghai is one of the key long-term development plans of the Company, which signifies that Pegasus has strategically positioned itself into diversified cultural businesses, with an aim to initiate a series of lateral business expansions. We will continue to capture sound business opportunities and strive to establish cinemas in more top-tier cities, so as to further expand our foothold in the PRC."
About Pegasus Entertainment Holdings Limited
Pegasus Entertainment Holdings Limited, as a diversified cultural business group, is principally engaged in the business of films and television series production, distribution, licensing of film rights, film exhibition and post-production.
About "4DX" technology
4DX is a state-of-the-art technology that advances the movie theater experience through motion chairs equipped with motion simulators and by offering environmental effects such as wind, bubbles and scent, etc. that works in perfect synchronicity with the action on screen. There are approximately 100 4DX theaters in 24 countries worldwide with growing recognition in Hollywood. Cinema City Langham Place is the only movie theater in Hong Kong equipped with 4DX technology as of present.
For further details, please refer to the announcement on HKEX website: