Huayi Tencent Entertainment : Announces 2021 Annual Results The Launch of the Internet Healthcare Business Drives Revenue Boosted Nearly 2 Times to HK$328 Million

[Immediate Release]

Huayi Tencent Entertainment Announces 2021 Annual Results

The Launch of the Internet Healthcare Business

Drives Revenue Boosted Nearly 2 Times to HK$328 Million

Results Highlights:

•  During the Year, with the demand for online healthcare services increasing, the Group seizes the opportunity to officially set foot on the internet healthcare market, which contributed the revenue of approximately HK$59 million to the Group. The Group recorded a growth in revenue by approximately 2 times to

  HK$328 million.

•  The Group had acquired "Echartnow" at a consideration of RMB40 million in

  the Year. ''Echartnow'' is a new retail platform offering online prescription, circulation and marketing of pharmaceutical products with an aim to building up of an entire healthcare ecosystem, which recorded a revenue of approximately HK$36 million.

•  The Group established "Meerkat Health", a joint venture for smart healthcare services, which was launched in the second half of 2021. "Meerkat Health" focused on health management and recorded a revenue of approximately HK$22 million by the end of 2021.

•  The Group has been keeping close tabs on digitised transformation of the film industry and has arranged a number of films to be screened on the streaming platforms with the approach of "offline + online" dual release. The

  Entertainment and Media segment generated a breakthrough revenue growth of approximately HK$155 million, being a significant rise of more than 10 times over the same period last year.

(31 March 2022 - Hong Kong) Huayi Tencent Entertainment Company Limited ("Huayi

Tencent Entertainment," the "Company"; Stock code: 00419.HK; together with its subsidiaries collectively known as the "Group") announced its annual results for the

year ended 31 December 2021 (the "2021" or the "Year").

During the Year, the Group's total revenue amounted to approximately HK$327,713,000 (2021: HK$111,055,000), representing a year-on-year increase of 2

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times. In line with the rapid development of internet pharmaceutical and healthcare services in the PRC, the Group has officially launched the Internet Healthcare business during the Year, contributing revenue of approximately HK$58,644,000 (2020: Nil) to the Group. Meanwhile, the Group actively adopted the approach of "offline + online"

dual release. The revenue from the Entertainment and Media segment had risen significantly by 10 times over the same period last year to approximately HK$155,340,000 (2020: HK$13,780,000). Healthcare and Wellness Services segment had also fully resumed operation with the pandemic situation being contained in the PRC, recorded revenue boost of 17% to approximately HK$113,729,000 (2020: HK$97,275,000).

During the past few years, the regulatory bodies of the PRC have been enthusiastic about supporting and encouraging the rapid development of the internet healthcare sector on the basis of standardization, resulting in a gradual increase in the popularity of the internet healthcare services. The Group, well aware of the direction of the market in advance, had already established its strategic layout accordingly. The Group officially set foot on the Internet Healthcare business by acquiring an online prescription platform ''Echartnow'' and establishing a joint venture "Meerkat Health" for smart healthcare services. These businesses contributed revenue of approximately HK$60 million to the Group by the end of the Year, demonstrating enormous potential for the development.

In April 2021, the Group has completed the Acquisition and Capital Increase of 51% equity interest in the Pingtan Xinban Clinic Company Limited (''PTXB''), at a consideration of RMB40 million. PTXB Group has developed and operates its new retail platform ''Echartnow'' which covers online prescription, circulation and marketing of pharmaceutical products. Through the model of "private traffic" and different interfaces, the platform connects doctors, patients, physical pharmacies and pharmaceutical companies closely and offers different user terminals in the healthcare industry their own "digitised enterprise operation solution". By the end of 2021, the revenue generated by ''Echartnow'' platform was approximately HK$36 million. The

Group will continuously invest and develop the platform to provide more solutions, and target to building up an entire healthcare ecosystem.

Moreover, the Group has established the joint venture "Meerkat Health" together with the industry elites in October 2021 and achieved the revenue of approximately HK$22 million in a short period of time. "Meerkat Health" has developed products and services including circulation platform for the pharmaceutical supply chain, the service

platform for healthcare services users and the system for digitalised medical products, targeting to bea comprehensive digitised healthcare services platform with effective combination of the industrial internet and consumer internet. Following the successful development of the relevant products and services, the Groups expects that the operating revenue of ''Meerkat Health'' in 2022 will record a drastic growth.

As for the Entertainment and Media segment, the film and entertainment industry as a whole continued its road of recovery in 2021. Theatres were re-opened in regions where the pandemic had come under control. At the same time, streaming platforms gradually overtake the market, resulting in the new normal of integration of online and offline movie watching. The Group has been keeping close tabs on digitised transformation of the film and entertainment industry. During the year, a number of films were arranged to be screened on the streaming platforms, with ''Space Sweepers'' and ''Cherry'', both jointly financed and produced by the Group, presented to worldwide audience (except those in the PRC) through Netflix and Apple TV+, attaining attention and satisfactory response from both the market and the viewers.

"Extinct", an original animated comedy, had adopted the approach of "offline + online"

dual release, being presented to the worldwide audience in both physical theatres and streaming platform Netflix. In addition, "Moonfall", a Hollywood tentpole financed by the Group, was screened on 4 February 2022 in the United States and most countries or regions across the globe. It was also on theatres in the PRC since 25 March 2022.

During the Year, the revenue of the Healthcare and Wellness Services continued to improve, and the main reason was that the pandemic situation in the PRC has stabilised, allowing the operations of "Bayhood No. 9 Club", a healthcare and wellness centre, to be in full swing again with earnings boosted. "Bayhood No. 9 Club" is one of the top green health clubs in the PRC, with well-equipped facilities such as a standard golf course, spa facilities as well as food-and-beverages-related business to offer professional and excellent healthcare and wellness services. The burgeoning awareness of the importance of outdoor activities and personal health in the aftermath of the pandemic helped enhance the revenues with regard to membership subscription, green fee and food and beverages, etc., meaning that the performance of the Healthcare and Wellness services is once again booming. The Group will continue to strictly follow the preventive hygiene measures in place and grasp the increasing demand for outdoor activities to maintain the stable growth in revenue.

Mr. Yuen Hoi Po, Executive Director and Chief Executive Officer of Huayi Tencent Entertainment, said, "In the post-pandemic era, the demand for internet healthcare

services is increasing. The Group has proactively captured the unprecedented opportunities brought by healthcare reforms and industry digitalization, officially entering the internet healthcare market and successfully delivered revenues in a short period of time. The internet healthcare business is in a fast growth stage. The Group will continue to focus on strategic layout, continuously recruit industry elites in the field, and invest additional resources to further promote the accelerated development of the intelligent healthcare service platforms of "Echartnow" and "Meerkat Health", which are believed to create a drastic growth for the Group in the future. Looking forward to 2022, the development potential of the internet healthcare market will continue to expand driven by various favorable policies. The Group will also closely monitor the latest industry trend and scout internet healthcare projects with potential, so as to deliver a range of diversified smart healthcare services and further tap into the new blue ocean of intelligent healthcare market.

The recovery path of the film and entertainment industry in 2022 is still filled with uncertainties due to the resurgence of the global pandemic. The Group will take a conservative and prudent stance while selecting and investing in appropriate movie projects, and formulate the strategies and directions for the Entertainment and Media operation with flexibility. In the future, the Group will focus on the Internet Healthcare business, actively consolidate the development of various businesses and strengthen the Group's strategic planning to achieve a more long-term and stable business blueprint and create maximum profit returns for shareholders.

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About Huayi Tencent Entertainment Company Limited

Huayi Tencent Entertainment Company Limited (Stock Code: 00419.HK) conducts businesses in two segments namely Healthcare and Entertainment and Media. The

Group's Healthcare business focuses on 1) healthcare service platforms, "Echartnow" and "Meerkat Health", providing a series of online healthcare services and striving to build an internet healthcare platform ecosystem; 2) the operation of "Bayhood No. 9 Club", one of the top green health clubs in the PRC with well-equipped facilities such as a standard golf course, spa facilities as well as food-and-beverages-related business to offer professional and excellent healthcare and wellness services. In respect to the Entertainment and Media business, the Group produces quality international films, animations, and TV dramas, and invests in international entertainment companies through M&As and resource integration, aimed at building an integrated platform with both content development and online-to-offline entertainment channels.

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