Qin Jia Yuan Media Services Establishes new Television Advertisement Platform

Qin Jia Yuan Media Services Company Limited (Stock Code: 2366, the “Group” or “QJY”) announced the completion of the building of a new exclusive TV advertisement platform with an advertising value of RMB 250 million, covering Northern China, Eastern China, Southern China, Middle China, South West, North West and North East China. The establishment of the platform, named “Dandelion Theatre”, commenced in November 2008 and was expected to develop into a new platform with a prime- time exclusive advertising agency network of 50 TV stations by the end of 2009. The platform is now completed half a year earlier than expected.

Dr. Leung Anita Fung Yee Maria, Chief Executive Officer of QJY, said “The advertising platform covering seven major areas of mainland China completed earlier than expected was attributable to the benefits of the global financial tsunami occurred in the fourth quarter of last year. As the global economy has been under severe attack, competition in advertising agency business in China has been adversely affected and economic strength and budget of various advertising agents have been questioned and challenged, ”

Adds Dr Leung Anita Fung Yee Maria “TV stations would rather lower the agency requirements, including the reduction of total agency fees and prepaid agency fees, among others, so as to search for reputable agents and ensure non-occurrence of defaults. For its good reputation in the media industry in China for almost fifteen years, and its main board listing status in Hong Kong, QJY has been well positioned in advertising agency negotiations in the past half a year. Due to uncertain future economic conditions, quite a number of TV drama production units in China announced withdrawal of capital and suspension of production, thus seriously impaired long-term investment plans in TV dramas, resulting in increasing demand by TV station for quality TV dramas. Therefore, QJY has been chosen as the cooperation partner for its vast TV drama data base with several thousand episodes completed for years to provide second round broadcasting rights for quality TV dramas with viewer assurance to the platform, and assure drama sources for such TV stations. The earlier-than-expected completion of “Dandelion Theatre” of QJY specifically reflected the essence of opportunity taken in crises.”

Liu Yuk Chi, the chairman of the strategy committee appointed last year by the board of the Group, said “The new platform has covered nineteen provinces, autonomous regions and municipalities of China like Chongqing, Tianjin, Shandong, Jiangxi, Henan, Hubei, Jiangsu, Anhui, Hunan, Guangxi, Hainan, Guangdong, Sichuan, Yunnan, Heilongjiang, Shanxi, Shaanxi, Gansu and Xinjiang. The platform will commence full operation in July 2009 and is expected to introduce more than RMB20 million of advertising agency fees to the Group in the first year. From the perspective of business strategy, the establishment of the advertising agency platform covering nationwide TV media has a material impact to the enhancement of advertising client network of QJY. Thereby we will serve various clients, cover and interact among different brands and products, and clearly and effectively provide advertising and sponsorship clients with more avenues for advertising their products. This is closely related to the public relation and marketing businesses to be strengthened by the Group, so as to create the synergy effect of low cost and high efficiency.”

The platform will have at least two minutes prime-time commercial of each TV channel per day. QJY will earn advertising fees by selling such advertising time directly to advertising agents and advertisers. This operation model of mutual sharing of resources, mutual interaction, cooperation and benefiting will create the synergy effect of income generating and cost saving. Liu Yuk Chi estimated that the rates of the platform start comparatively low at present and will have 10% room for growth after the assumption of the operation of the platform by QJY.

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