Maoyan Turns Profit for First Time with Adjusted Net Profit of RMB380 Million

HONG KONG,Aug. 15,2019 -- Maoyan Entertainment ("Maoyan" or "the Company") (Hong Kong: 1896),today announced its financial results for the six months ended June 30,2019.

Optimized revenue mix and lower expenses drive strong results

In the first half of 2019,the Company recorded its first profit as a public company with an adjusted net profit[1] of RMB380.4 million. The strong performance was driven by Maoyan's continued work to optimize its revenue mix as a part of the Company's comprehensive entertainment strategy.

In the first half of 2019,total revenue was RMB1,984.6 million. Revenue from entertainment content services increased 18.7% year-on-year to RMB665.7 million,accounting for 33.5% of total revenue,up from 29.6% in the same period last year. Revenue from advertising services rose by a significant 78.1% year-on-year to RMB156.4 million,accounting for 7.9% of total revenue,up from 4.6% in the same period last year. In addition,selling and marketing expenses decreased by 46.7%,which helped to drive the move to profitability.

Major breakthroughs achieved

Maintained leading position in online entertainment ticketing services

Maoyan maintained its position as the largest online movie ticketing service provider in China in terms of GMV of movie tickets sold. The Company's market share remained over 60% and continued to increase. Maoyan's live entertainment event ticketing services achieved rapid growth,with a 40.5% year-on-year increase in GMV thanks to its strong online and offline promotional and marketing capabilities for artists and content. During the first half of 2019,Maoyan provided innovative promotional and marketing support to concerts of top-tier artists such as Leehom Wang,Miriam Yeung,JJ Lin and Karen Mok,as well as well-known dramas including Duan Jinstarring Zhang Guoli,Wang Gang and Zhang Tielin,and Balconystarring Chen Peisi.

Strong performance from entertainment content services

In the first half of 2019,Maoyan made a number of major breakthroughs in its distribution,promotion and production capabilities. The gross box office from movies for which Maoyan served as lead distributor was RMB4.1 billion. The Company was the lead distributor for Kill Mobile,which ranked No. 1 during the New Year; White Snake,which attained the highest Maoyan score in history for a domestic animated film; Pegasus,which ranked No. 3 during the Chinese New Year; P Storm,which ranked No. 1 during the Qingming Festival; and Song of Youth,which was the largest box office dark horse in the first half of 2019. Maoyan was also a co-distributor for Boonie Bears: Blast into the Past,the No. 1 animated film during the Chinese New Year; and My Best Summer,which ranked No. 1 during the Dragon Boat Festival. In addition,Maoyan invested in the highest-grossing movie in the first half of 2019,The Wandering Earth.

In addition to movies,Maoyan has been actively developing its TV and web series business. Maoyan co-produced The Longest Day in Chang'an,which became one of the most popular web series in the first half of 2019. It also co-produced high-quality TV series such as Traditional Chinese Medicineand Unbeatable You. Maoyan expanded further up the value chain to capture more opportunities for value creation. By investing in renowned film companies Huanxi Media Group Limited and Erdong Pictures Group Limited,and strengthening cooperation with the FIRST International Film Festival,a platform for young filmmakers,Maoyan enhanced its relationships with entertainment content producers to better ensure the production of high-quality content.

Maoyan continued to expand across the entertainment industry value chain. The Company continued to promote Maoyan Pro,which provides data and information for players across the entertainment industry. In the first half of 2019,the average MAU of Maoyan Pro increased 26.6% year-on-year. Meanwhile,the Company has been making significant progress turning the Maoyan Research Institute into the leading analysis platform for the entertainment industry. It entered into strategic partnerships with companies such as IMAX,Sony and Tencent Pictures,and provided data analysis services to over 100 movies. In addition,Maoyan launched a big data and AI technology platform,Maoyantong,which provides industry partners with comprehensive SaaS solutions covering everything from project initiation and production,to promotion,distribution and screening,thus enabling them to achieve one-stop project management. The platform has already provided professional services to over 120 movies and TV series.

Advertising business creating new growth drivers

Maoyan's advertising business grew rapidly,differentiating it from its peers within the highly competitive advertising market. Maoyan's advantages lie in its integrated marketing platform that seamlessly connectsonline and offline resources. Maoyan's online resources include six online access portals,namely WeChat,QQ,Meituan,Dianping,Maoyan and Gewara,covering social media,e-commerce and daily consumer services. Maoyan's mini programs are also available on various social media platforms with over 200 million users. The Company has grown to become one of the leading entertainment media platforms in China. Its content topped the charts on various social media platforms such as Douyin and Weibo,attracting close to 200 million followers. Maoyan also established sound cooperation relationship with 9,500 cinemas and have over one million exposures in 460 universities and 130 central business districts across 42 cities in China.

The Company has gained widespread recognition fromadvertisers. Maoyan helped generate a total of 1.78 billion views in a joint marketing campaign in China for Mars Inc's M&M's and Spider-Man: Far from Home,which attracted extensive attention in the advertising industry. Furthermore,Maoyan provided integrated marketing services for a number of famous brands,including General Motors,Yum China and JD.com in the first half of 2019.

Five key platforms supporting continued business development

On July 9,Maoyan launched its comprehensive entertainment strategy in Beijing. The new "Cat Claw Strategy Model" is supported by five key platforms: comprehensive entertainment ticketing,product,data,marketing and financing. The five platforms have played an important role by providing integrated services for Maoyan's diversified businesses. The Company will continue to improve its capabilities that cater to the core needs of different industries and the Company's own specific strategies.

For example,Maoyanplans to further improve its data analysis capabilities and analytical tools,such as Maoyantong and Changguantong,to build a solid foundation for the Company's comprehensive entertainment data platform. The Company will continue to integrate its online and offline marketing capabilities to support the continued growth of Maoyan's various businesses.

Maoyan's first profitable results demonstrate the initial success of its comprehensive entertainment strategy. With the huge potential of China's entertainment market,the Company is expected to create greater value for the entertainment industry by expanding its presence across movies,live performances,TV shows,videos,short videos,media,music,artists and key opinion leaders.

[1]In the first half of 2018 and 2019,Maoyan defined adjusted net profit/(loss) as net profit/(loss) for the six months by adding back share-based compensation,net losses of convertible bonds and financial liabilities at fair value through profit or loss,listing expenses,the amortization of intangible assets resulting from business combinations and the impairment provision of goodwill resulting from business combinations.

About Maoyan Entertainment

Maoyan Entertainment (Hong Kong: 1896) is a leading platform providing innovative Internet-empowered entertainment services in China. Since its inception,Maoyan has grown from an online movie ticketing service provider to an innovative one-stop platform for entertainment services. Maoyan has a comprehensive strategy to become a leading platform servicing the entire entertainment industry in China. The upgraded strategy is supported by five key platform pillars: online ticketing platform,products and services platform,data platform,marketing platform,and funding platform.

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