A8 Music Announces 2009 Interim Results

August 13, 2009
    HONG KONG, Aug. 13 /PRNewswire-Asia/ --

    Business Highlights:

    -- A8 Music is a leading and a pioneer integrated digital music company in
       China. It is recognized as a national high technology enterprise as
       well as the leading culture enterprise in Shenzhen
    -- Net profits has grown continuously with profit attributable to equity
       holders for the first half of 2009 up by 21% to RMB44.9 million
    -- Apart from collecting original music via its UGC platform, A8 Music has
       forged exclusive partnerships with record labels such as HIM and Gold
       Typhoon, enabling it to enrich its music content
    -- Established exclusive partnership with Xinhua News Agency to build a
       Mobile Media Service Platform that provides a full range of multimedia
       services such as news, music, games and videos to mobile phone users
    -- Penetrated to renowned MTK chipset and launched a download version of
       A8 Box for Symbian Platform users

Leading integrated digital music company in China A8 Digital Music
Holdings Limited (“A8 Music” or the “Group”) (Stock Code: 00800.HK) today
announced its unaudited interim results for the six months ended 30 June 2009.

During the period under review, the Group generated revenue of
approximately RMB291.0 million, representing a slight decrease of
approximately 12% as compared with the same period last year. Profit
attributable to equity holders amounted to RMB44.9 million, up by 21%. Basic
earnings per share were RMB0.10 (2008 interim: RMB0.11). The Board of
Directors did not recommend payment of interim dividend for the six months
ended 30 June 2009.

There was an exclusive one-off event cooperated with one of the mobile
operators last year. Excluding the impact of this one-off event, the revenue
of the Group represented a slight increase of approximately 4% and net profits
would have been increased by 30% as compared with the same period in 2008.

Mr. Liu Xiaosong, Chairman of A8 Music, said, “Expansion on content and
continued R&D on A8 Box are the focuses of the Group this year. We have forged
exclusive partnerships with major record labels HIM and Gold Typhoon, and the
only Chinese government news media platform Xinhua News Agency. Furthermore,
we managed a breakthrough for A8 Box by cooperating with Taiwan’s leading
chipset producer MTK and developing a download version of the software for the
Symbian Platform, which will substantially increase the penetration rate of A8
Box in China’s handsets market. All these achievements will enable us to
gradually expand our income base and brace for the long-term development of A8

A8 Music has been successful in collecting and monetizing original music
using its interactive UGC platform. In the first half of 2009, the revenue
generated from UGC songs made up approximately 44% of the total music and
music related revenue of the Group, an increase of 9 percentage points when
compared with the same period last year. The top five UGC songs were
downloaded over 22.8 million times in the first half of 2009. Among them,
“Zhan Chi Tian Kong” was downloaded over 4.5 million times since its debut in
February this year. This song together with “RenCuo” were on the China Mobile
Wireless Top 10 and Baidu’s Top 10 Billboards.

The Group strives to continue its leadership in digital music by
synergistically applying its UGC model onto traditional music content. With
its selling and promotion strengths to generate digital music income, the
Group has strong appeal as a partner to renowned traditional record labels,
such as HIM and Gold Typhoon. The Group collaborated with HIM, who manages
popular bands and artists like S.H.E., Fahrenheit and Power Station, to
promote and monetize their songs exclusively on the digital platform in China.
A similar arrangement has been made with Gold Typhoon for the songs of Zhou
Bichang in the mobile sector as well as A8 Box. The Group expects additional
digital income from these songs in the coming years.

The Group has been actively involved in various nationwide music
competitions including the Fourth Original Music Contest, Pepsi’s national
Battle of Bands. Furthermore, A8 Music, as the exclusive digital music
platform, co-organized the most authoritative music contest Golden Bell
Contest. These endeavors will give the Group exclusive access to unique music
content for enriching its UGC platform.

In order to boost the penetration rate of the Group’s proprietary software
A8 Box, the Group has finalized cooperation with MTK to embed A8 Box, as a
major recommended music player, in the future MTK’s chipsets which is expected
to be delivered from fourth quarter of 2009 onward. In addition, the Group has
completed a download version of A8 Box with richer music functions for Symbian
Platform users. It is expected that more than 10 million handsets will be
equipped with A8 Box in 2009, including handsets from Nokia and K-Touch.
Ultimately, the Group’s vision is to develop A8 Box into a ‘total music
solution’ on a multi-terminal and multi-device basis.

The Group has also established an exclusive partnership with Xinhua News
Agency to build the Mobile Media Service Platform. Leveraging on Xinhua’s news
services and the Group’s music services, it will become a major media platform
for China’s three mobile telecom operators with the provision of a full range
of services including news, music and music related services, videos, games,
etc. to mobile users. At the same time, the Group has started to work closely
with the three mobile operators in China in developing products that are
compatible with all three 3G platforms so as to capture opportunities brought
by the rollout of 3G services.

Mr. Liu concluded, “The digital music market in China is only in its
development stage, meaning it has enormous room for growth. As an industry
leader and pioneer, and in a sector supported by the government, A8 Music will
continue to seize every opportunity to pave the way for our growth in the
future and hence to enhance value to our shareholders.”

                    A8 Digital Music Holdings Limited
                      Consolidated Income Statement

    (Unaudited)                          For the six months ended 30 June
                                                  2009                2008
                                               RMB'000             RMB'000
    Revenue                                    290,756             329,404
    Business tax                                (4,514)             (5,659)
    Net revenue                                286,242             323,745
    Cost of services provided                 (173,826)           (187,960)
    Gross profit                               112,416             135,785
    Other income and gains, net                  8,072               1,697
    Selling and marketing expanses             (43,194)            (61,832)
    Administrative expenses                    (25,681)            (16,320)
    Other expenses                                 (81)            (11,773)
    Finance costs                                   (-)             (1,883)
    Profit before tax                           51,532              45,674
    Tax                                         (6,502)             (7,713)
    Profit for the period                       45,030              37,961

    Attributable to:
    Equity holders of the Company               44,895              37,026
    Minority interests                             135                 935
                                                45,030              37,961
    Earnings per share attributable
    to equity holders of the Company
    Basic (RMB per share)                         0.10                0.11
    Diluted (RMB per share)                       0.10                0.11

About A8 Digital Music Holdings Limited

A8 Music is a leading integrated digital music company that sells music
content through mobile phones, sourced from its highly successful interactive
UGC platform http://www.a8.com , as well as from international and domestic
record labels, and promoted through traditional and new media such as internet
and wireless network. Led by a team of experienced top executives with
foresight and vision, the Group is able to capitalise on its integrated
marketing and sales multi-channel network to acquire insights into consumer
preferences in different regions and thus customize its marketing strategies.

    For press enquiries:

     Strategic Financial Relations (China) Limited

     Ms. Esther Lau
     Tel:   +852-2864-4845
     Email: esther.lau@sprg.com.hk

     Mr. Marcus Keung
     Tel:   +852-2114-4967
     Email: marcus.keung@sprg.com.hk

     Ms. Janice Au
     Tel:   +852-2864-4874
     Email: janice.au@sprg.com.hk

     Ms. Christine Wong
     Tel:   +852-2114-4949
     Email: christine.wong@sprg.com.hk

SOURCE A8 Digital Music Holdings Limited

Source: newswire

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