Huayi Tencent Entertainment : Announces 2021 Interim Results Revenue from Entertainment Business Surges 34 Times to Approximately HK$130 Million with

Press Release

[Immediate Release]

Huayi Tencent Entertainment Announces 2021 Interim Results Revenue from Entertainment Business Surges 34 Times to Approximately HK$130 Million with Two Successful Film Releases

Results Highlights:

• The film industry has shown signs of recovery gradually on the transformation in the midst of the pandemic and digitization, driving up the Group's business during the Period with total revenue amounted to approximately HK$183,377,000, representing a period-to-period increase of 3.3 times. Revenue from the Entertainment and Media Operations had risen significantly by 34 times to approximately HK$127,392,000.
• "Space Sweepers" and "Cherry", financed and co-produced by the Group, were launched on the online streaming platforms Netflix and Apple TV+ respectively, which are widely welcomed by audiences and further boosted the business revenue.
• During the Period under review, the Group has, at a consideration of RMB40 million, acquired 51% of the equity interests in PTXB Group which develops "Lingyi Future", a new retail platform for prescription drugs, grabbing the potential for the internet healthcare and medical service markets.
• The Group actively promotes online and theatrical film screenings. ''Extinct'', an original animated comedy aiming for family viewing, will be screened through theatrical release and Netflix in the second half of this year, bringing a fresh round of revenue to the Group by then.

(20 August 2021 - 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 interim results for the six months ended 30 June 2021 (the "first half of 2021" or the "Period").

During the Period under review, the Group's total revenue amounted to approximately HK$183,377,000, representing a period-to-period increase of 3.3 times. The revenue from the Entertainment and Media Operations had risen significantly by

1Financial PR(HK)Limited 金融公關（香港）有限公司 14/F Chung Nam Building, 1 Lockhart Road Wanchai, Hong Kong 香港灣仔駱克道 1 號中南大廈 14 樓

Press Release

34 times to approximately HK$127,392,000 (2020: HK$3,665,000), mostly thanks to the global screening (except in the PRC) of ''Space Sweepers'' and ''Cherry'', which were financed and co-produced by the Group, via Netflix and Apple TV+ respectively. Healthcare and Wellness Services had resumed their normal operations with the pandemic being contained in the PRC, recorded revenue boost of 45% to approximately HK$55,985,000 (2020: HK$38,691,000).

On the other hand, the filming and production works of HB Entertainment Co., Ltd. (''HB Entertainment''), an associate in which the Group holds a stake of 31%, were impeded due to the raggedness of the pandemic in Korea. As there had not been any release of new television drama projects during the Period, the Group's share of loss from its associate had increased to approximately HK$1,917,000 (share of loss in 2020: HK$396,000). Segment profit generated from the Group's Entertainment and Media Operations amounted to approximately HK$9,117,000 (2020: HK$1,736,000), representing a period-to-period increase of 4.3 times.

For film project investment and cooperation, the Group has been looking for channels for digitization during the Period by arranging the screening of ''Space Sweepers'' and ''Cherry'' via online streaming platforms Netflix and Apple TV+ respectively, with more and more people watching films and dramas at home via streaming platforms. ''Space Sweepers'', Korea's first sci-fi space feature film which was financed and co-produced by the Group, became the most popular film on the international streaming platform as well as receiving the attention of and commendable feedback from the market and audience. Besides, the Group has continuously focused on producing, distributing and investing high-quality films, including "Moonfall'', a Hollywood sci-fi and disaster epic which is currently at the post-production stage and is expected to be released in 2022. The Group has also acquired the PRC distribution rights of Hollywood film ''Chaos Walking'' which is scheduled to be premiered in the PRC on 27 August 2021. With the worldwide film industry has shown signs of recovery, it is expected that, with multiple films scheduled to be released and screened, the revenue of the Entertainment and Media Operation will be further enhanced.

The convergence of online and offline film watching is being the new trend of industry development, facilitating more movies to be screened both online and offline to increase the profitability from reaching numerous audiences. Following the successful release of "Space Sweepers" and "Cherry" on streaming platforms during the Period, "Extinct", an animated comedy aiming for family viewing invested by the Group, will be screened through the online platform as well as making theatrical release. It was

2Financial PR(HK)Limited 金融公關（香港）有限公司 14/F Chung Nam Building, 1 Lockhart Road Wanchai, Hong Kong 香港灣仔駱克道 1 號中南大廈 14 樓

Press Release

on theatres in some parts of Europe since the second half of the year, while the theatrical release in the PRC is under arrangement. The online release for the rest of the world will be shown on Netflix. The Group will continue to closely follow the development trend of the industry and actively strengthen its cooperation with various international streaming platforms in order to have its products screened both online and offline.

As for the Healthcare and Wellness Services, in order to further grab the potential for development of the internet healthcare and medical service markets, the Group acquired 51% of the equity interests in Pingtan Xinban Clinic Company Limited (''PTXB'') Group at a consideration of RMB40 million during the Period. Through its new retail platform for prescription drugs, "Lingyi Future", medical practitioners, patients and physical pharmacies are connected by establishing a closed loop from issuance of electronic prescriptions by doctors, order of prescription drugs at pharmacies by patients, online payment to delivery of the drugs prescribed. As the project is still budding and has yet to make a significant contribution, the operation of "Bayhood No. 9 Club" remained the mainstay in terms of revenue generation to the Healthcare and Wellness Services during the Period. The effective control of the pandemic in the PRC means that the Club can operate as usual, the demand for outdoor sports has soared with a growing awareness of personal health in the post-pandemic era. Golf playing- related business has therefore been in an upturn again, and performance of the food and beverages operation has in turn recorded a period-to-period improvement. As a result, the revenue recorded a significant increase over the same Period.

Mr. Yuen Hoi Po, Executive Director and Chief Executive Officer of Huayi Tencent

Entertainment, said, "With the rolling out of vaccines and a universal vaccination campaign, the worldwide theatres and film production projects resume complete normalcy leading to the gradual recovery of the film industry. At the same time, the accelerated transformation and digitization of the film industry produced the trend of convergence of online and offline film watching. The Group actively seeks a way to a diversified mode of cooperation to present the films to the audience in both forms of online streaming and theatrical release. In the future, the Group will also continue to strengthen its cooperation with the online streaming platforms, in-depth layout of the global film market as well as to produce high-quality film and television works, aimed at building an integrated platform with both content development and online-to- offline entertainment channels.

Facing the growing demand for health services in the post-pandemic era, the Group

3Financial PR(HK)Limited 金融公關（香港）有限公司 14/F Chung Nam Building, 1 Lockhart Road Wanchai, Hong Kong 香港灣仔駱克道 1 號中南大廈 14 樓

Press Release

has deployed strategic layout on digitalized pharmaceutical and medical care services by acquiring "Lingyi Future", a new retail platform for prescription drugs. Looking ahead, with the huge potential for development of the internet healthcare and medical service markets, the Group will continue to identify acquisition targets with high growth potential projects, so as to capture the unprecedented opportunities brought by healthcare reforms and industry digitalization, and to create high growth returns for the Group and shareholders."

-End-

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 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.

Media Contacts

Financial PR (HK) Limited

Ms. Dawn Lee	Email:[e-mail]
Ms. Elva Li	Email:[e-mail]
Ms. Cita Zhang	Email: [e-mail]
Tel: [phone]
Fax: [phone]

4Financial PR(HK)Limited 金融公關（香港）有限公司 14/F Chung Nam Building, 1 Lockhart Road Wanchai, Hong Kong 香港灣仔駱克道 1 號中南大廈 14 樓