|Heng Xin China Proposed a New Joint Venture Company to Develop a Digital Cable TV Broadcasting Network in Rural Areas in Anhui Provinc
Heng Xin China Holdings Limited (ACN Newswire)
2012-05-17 Hong Kong, May 17, 2012 - ( ACN Newswire ) - Heng Xin China Holdings Limited ("Heng Xin China"/"the Group")(SEHK: 8046) today announced that Shenzhen Champion Maxiumic Group Co., Ltd. ("Shenzhen Champion"), a wholly owned subsidiary of the Company, and Anhui Radio and Television Information Network Co., Ltd. ("ARTINCL") entered into a letter of intent for the proposed establishment of a new joint venture company in Anhui province. The Joint Venture is targeted to achieve subscriber base of the digital cable television of not less than 3 million in Anhui province within the next three years.
The Joint Venture will principally engage in the design, construction, development, operation, charge and maintenance of the digital cable television broadcasting network in rural areas in the whole Anhui province in China. The details of the Joint Venture such as the total investment, registered capital, forms of capital contributions, shareholding and composition of the board of directors are yet to be determined. It is expected that Shenzhen Champion will be responsible for the operation of the JointVenture.
Mr. Xiao Yan, Chief Executive Officer of the Group said, "To adapt to the national 'Three Networks Integration' policies, the Group has been transforming from a wireless digital television equipment integrator to an operator of television broadcasting integrated businesses since 2010. We are glad to establish a new joint venture company with ARTINCL. This will increase the Group's operational efficiency in its cable digital television business and provide an opportunity for the Group to access greater resources especially financial resources. The Group is also able to further expand its operational scale in cable digital television business in Anhui province and gain more significant prominence in the PRC broadcasting infrastructure platform and increase its revenue and profit in the future."
At present, the project has been launched in Huainan City and Suzhou City of Anhui province. The target subscriber base developed in Huainan City is not less than 100,000 by 2013 and 250,000 by 2015. The target subscriber base developed in Suzhou City is not less than 100,000 by 2013, 150,000 by 2014 and 250,000 by 2015.
ARTINCL is a subsidiary of Anhui Television Broadcasts and Media Industry Group Co., Ltd. ("Anhui TVB"), a state-owned company in Anhui province. ARTINCL is the sole cable television network constructor and operator in Anhui province which owns 4,500 km network covering all cities and counties across the Anhui province, connecting the four million users in the province and providing e-commerce, education, finance, lifestyle information and other information service to subscribers. Since 2010, the Group has started to cooperate with ARTINCL and Anhui TVB to create the digital cable television twoway interactive network and jointly develop and operate the value-added services for the existing subscribers of ARTINCL for 12 years (from the launch of the value-added services in each administrative areas) in return for the value-added services revenue sharing.
With the business expansion and active operation in 2011, the Group has already obtained the operation rights on 9.2 million cable television subscribers in such provinces as Jiangxi, Anhui, Hebei and Shanxi for a term of 12 to 15 years, and the operation rights on the wireless television business in Hebei province. The Group has fully completed its transformation, and has established its position as an operator of television broadcasting integrated businesses in the industry. For the nine months ended 31 March 2012, the revenue from digital cable television business amounted to approximately HK$112.1 million, representing an increase of approximately 57% over the same period last year.
The Group has achieved stable progress for its network construction project in the integration of the three networks and greater than expected revenue for the digital cable television operational business in rural areas. The revenue comprised operational revenues from basic subscription and other value added technology as well as market service income arising from the 1,000,000 subscribers of the Hebei rural television network and sales of digital cable television business related products. The basic network construction for 400,000 subscribers of broadcasting television in the rural areas is underway and expected to be completed in the first half of 2012.
The Group's existing operation right on value-added business covers areas such as Anhui and Nanchang of Jiangxi province. The Group has signed contracts on establishment and operation of value-added business for 5.5 million cable television subscribers. In Hebei province and Datong of Shanxi province, the Group has signed contracts on establishment and operation of basic television business for 3.7 million cable television subscribers. During the first quarter of 2012, the Group has completed the building of platform and testing for the 301 remote medical treatment project and the Group will enjoy the revenue from such project very soon.
About Heng Xin China Holdings Limited
Heng Xin China (HKSE:8046) is a leading technology and infrastructure provider for digital television broadcasting in China. The principal activities of the Group are engaged in digital cable television business, wireless digital terrestrial television network equipment integrated business, wireless digital television value added services, research, design, development on and manufacturing of electronic message security products, integrated circuits, and the integrated circuit solutions and the related services. Please visit www.hengxinchina.com.hk.
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