Securities code: Hengdian Entertainment Co.Ltd(603103) securities abbreviation: Hengdian Entertainment Co.Ltd(603103) Announcement No.: 2022004 Hengdian Entertainment Co.Ltd(603103)
Announcement on no profit distribution in 2021
The board of supervisors and all supervisors of the company guarantee that there are no false records, misleading statements or major omissions in the contents of this announcement, and bear individual and joint liabilities for the authenticity, accuracy and completeness of its contents.
Important content tips:
Hengdian Entertainment Co.Ltd(603103) (hereinafter referred to as "the company") plans not to distribute profits, convert capital reserve into share capital and distribute in other forms in 2021.
This profit distribution plan needs to be submitted to the 2021 annual general meeting of shareholders of the company for deliberation.
1、 Contents of 2021 profit distribution plan
According to the audit of Lixin Certified Public Accountants (special general partnership), the net profit attributable to the shareholders of the parent company in 2021 was 1366753658 yuan, and the profit available for distribution to shareholders was 14212429509 yuan as of December 31, 2021.
In order to ensure the normal production and operation of the company, realize the sustainable, stable and healthy development of the company, better safeguard the long-term interests of all shareholders, and comprehensively consider the actual situation of the company's long-term development and short-term operation, the board of directors of the company, in accordance with the notice on matters related to the further implementation of cash dividends of listed companies and the guidelines for the supervision of listed companies No. 3 - cash dividends of listed companies According to the guidelines for cash dividends of listed companies on Shanghai Stock Exchange and other relevant laws and regulations, as well as the articles of association and the company's shareholder return plan for the next three years (20192021), the profit distribution plan for 2021 is proposed as follows: no profit distribution, capital reserve converted into share capital and other forms of distribution.
The profit distribution plan needs to be submitted to the 2021 annual general meeting of shareholders of the company for deliberation.
2、 Description of no profit distribution in 2021
1. Industry situation
The film industry in which the company is located is still in the recovery stage by the end of 2021 due to the impact of the new coronal pneumonia virus epidemic in 2020. In 2021, China Film Co.Ltd(600977) market saw 1.167 billion people, and the total box office of mainland films was 47.258 billion yuan, of which the box office of domestic films was 39.927 billion yuan, accounting for 84.49% of the total box office. The number of cinemas increased steadily by 2481.8% year-on-year, with the number of cinemas growing steadily by 2021.
2. Development stage of the company and its own business model
At present, the company is in the stage of rapid development. It is an industry-leading and potential private cinema and cinema investment company in China. The company's main business is film and television investment, production, distribution, film projection and related derivative business, and has realized the whole industry chain strategic layout of "content + channel". At present, the content side mainly participates in investment with a certain proportion of shares; The projection end adopts the business model of mainly asset connection and supplemented by signing and joining. Its cinemas are divided into asset connection Cinemas (directly operated Cinemas) and joining cinemas.
3. Profitability and capital demand
In 2021, the company achieved an operating revenue of 2365695900 yuan, a year-on-year increase of 139.02%; The net profit attributable to the shareholders of the listed company was 136675 million yuan, turning losses into profits, mainly due to the effective control of the epidemic in China, the gradual recovery of the film market, the increase of various incomes of the company's projection business, and the films invested by the company's content sector achieved double harvests of social and economic benefits.
At present, the company's core business still has a large capital demand. The company plans to invest in 60 new cinemas in 2022, increase investment in the content side and accelerate the implementation of the "4 + 1" development strategy. In order to improve the market share and promote Hengdian Entertainment Co.Ltd(603103) brand, the company has a large capital demand.
4. Reasons for no profit distribution in 2021
According to the profit distribution policy formulated in the articles of association and the company's shareholder return plan for the next three years (20192021), on the premise that the company's profits and accumulated undistributed profits are positive in the current year, and there are no major investment plans or major cash expenditure plans in the next 12 months (except for fund-raising projects), In principle, the company conducts annual profit distribution once a year. The annual profit distributed by the company in cash shall not be less than 10% of the distributable profit realized in the current year, and the cumulative profit distributed in cash in the recent three years shall not be less than 30% of the annual distributable profit realized in the three years.
The company has accumulated cash dividends of 1084482 million yuan in 2019, 2020 and 2021. The net profits attributable to the shareholders of the listed company in the last three years were 309511300 yuan, - 480525800 yuan and 13667500 yuan respectively. The accumulated cash dividend amount exceeded 30% of the average annual distributable profit realized in the three years, which was in line with the articles of association, the shareholder return plan for the next three years (20192021) and other relevant provisions.
In view of the company's major cinema investment plan in the next 12 months and great demand for working capital, in order to ensure the normal production and operation of the company, realize the sustainable, stable and healthy development of the company, better safeguard the long-term interests of all shareholders, and comprehensively consider the long-term development and short-term operation reality of the company, the profit distribution plan for 2021 is formulated as follows: no profit distribution, Nor will capital reserve be converted into share capital or other forms of distribution. All retained earnings are used for the company's daily production and operation and future investment and development.
5. Purpose of retained undistributed profits
By the end of 2021, the company's remaining undistributed profit was 14212429509 yuan. The company will comprehensively consider the actual situation of the company, development strategy, the wishes of all shareholders, investment demand, operating costs and other factors. The retained undistributed profit is mainly used to meet the company's daily operating needs and accelerate the development layout of the whole industrial chain of "content + channel".
In the future, the company will always pay attention to the return to investors in the form of cash dividends, and actively implement the company's profit distribution system in strict accordance with relevant laws and regulations and the articles of association, so as to bring more returns to all shareholders.
3、 Decision making procedures performed by the company
1. Opinions of the board of directors
On March 10, 2022, the company held the fourth meeting of the third board of directors, deliberated and approved the proposal on the company's profit distribution plan in 2021, and agreed to submit the profit distribution plan to the company's 2021 annual general meeting for deliberation.
2. Opinions of independent directors of the company
The independent directors believe that the plan for no profit distribution in 2021 proposed by the board of directors of the company is based on the consideration of the stable operation and capital needs of the company, in order to ensure the sustainable development of the company and the long-term interests of all shareholders, and in line with relevant laws and regulations, the articles of association and the shareholder return plan for the next three years (20192021).
We approve the company's plan of no profit distribution in 2021 and agree to submit the proposal to the general meeting of shareholders for deliberation.
3. Opinions of the board of supervisors
On March 10, 2022, the company held the fourth meeting of the third board of supervisors, deliberated and approved the proposal on the company's 2021 annual profit distribution plan, which complies with relevant laws and regulations, the articles of association and the company's shareholder return plan for the next three years (20192021), Taking full account of the company's operating conditions in 2021 and the company's sustainable development and other factors, it is in line with the interests of all shareholders of the company.
4、 Relevant risk tips
This profit distribution plan needs to be submitted to the company's 2021 annual general meeting for deliberation. Please pay attention to the investment risks.
It is hereby announced.
Hengdian Entertainment Co.Ltd(603103) board of directors March 12, 2022
