Stock Code: 600977 Stock Name: China Film
China Film Group Co., Ltd.
Corporate Value and Return Enhancement
Action Plan
China Film Group Co., Ltd.
Corporate Value and Return Enhancement Action Plan
In 2024, China Film Group Co., Ltd. (hereinafter referred to as
"China Film" or "the Company") thoroughly implemented the spirit
of the 20th CPC National Congress, the Third Plenary Session of
the 20th CPC Central Committee, and the Central Economic Work
Conference. The Company took concrete measures to actively
implement the Action Plan of "Improving Quality, Increasing
Efficiency and Emphasizing Returns" in 2024, achieving positive
results across various tasks. Based on a comprehensive
assessment of the 2024 execution, and considering the Company's
development stage, industry characteristics, and investor demands,
China Film has formulated the Corporate Value and Return
Enhancement Action Plan in 2025. The 2024 Assessment Report
and the 2025 Action Plan are hereby announced as follows.
Part I: Assessment Report of Corporate Value and Return
Enhancement Action Plan in 2024
I. Deeply Cultivating the Film Industry and Improving the
Quality of Operation
In 2024, the Company produced and released 46 films,
accounting for 70.19% of the total box office for domestic films. The
Company's productions occupied 9 spots in the annual top 10 box
office rankings and won over 140 domestic and international
awards, including the Best Works Award and China Film Golden
Rooster Awards. Among them, the epic film The Volunteers: The
Battle of Life and Death, which comprehensively depicted the great
course of the War to Resist U.S. Aggression and Aid Korea, was a
tribute to the 75th anniversary of the People's Republic of China,
winning the National Day holiday box office championship and
topping the audience satisfaction survey. The Journey of a
Legendary Landscape Painting, exploring the creative
transformation of China's outstanding traditional culture through
cross-media artistic techniques, was hailed by audiences as the
"Most Beautiful Film of the Year". The tribute films celebrating the
You and Revisit, resonated with young audiences, reflecting the
enduring and deep kinship bonds where blood is thicker than water.
Snow Leopard, using Xizang’s cultural elements to convey
philosophical contemplation, won multiple awards including "Best
Film" award at the 36th Tokyo International Film Festival. The
"China Film Youth Talents Initiative" released 5 films covering
genres such as thriller, comedy, and romance.
The Company completed the reform of the film production
system, integrating the production and post-production business
systems to establish a unified layout centered on creation,
spanning investment, development, production, and operation.
China Film Studio has completed adjustments of organizational
structure, personnel composition, and business processes. The
Company completed the equity acquisition of China Film Innovation
and Development (Beijing) Co., Ltd., incorporating rural film and
campus film businesses into the industrial chain system, creating
conditions for integrating secondary markets and expanding
incremental market space.
The Company advanced the digital transformation and
upgrading of financial management, with the Company's Treasury
Management System officially launched. The Company deepened
the integration of business and finance, strengthened source
control and process monitoring and warning, increased operating
cash inflows, and reduced bad debt risks. The Company launched
a tax system to enhance the accuracy and standardization of tax
work. The Company formulated the Accounts Receivable
Management Measures, strengthening partner credit management
and establishing a negative list based on risk factors such as
defaults and solvency.
II. Promoting Scientific and Technological Innovation and
Developing New Quality Productive Forces
The board of directors formulated and released the Work Plan
for Advancing Film Technology Innovation Capacity Building
(2024-2026). Centering on the core goal of enhancing
technological capabilities, the Company systematically integrated
technology-related businesses, assets, talents, and resources,
reorganized and established "China Film Technology" as an
innovation entity. Currently, this subsidiary has completed
adjustments to its organizational structure, personnel composition,
and business processes, further rationalized its business
framework, enhanced synergies, and made its core film technology
advantage more prominent.
In 2024, the Company's R&D investment exceeded RMB 60
million, a year-on-year increase of 20.73%. The Company
accelerated the implementation of the Ministry of Science and
Technology's National Key R&D Program Systematic Research,
Development and Application of Key Technology in the Whole
Cinema Industrial Chain for High-Format Film, completing testing
and key system development for high-format cameras,
post-production platforms, and virtual studios. China Film's CINITY
LED CFL-10 obtained the latest DCI CTP 1.4.1 certification. The
pixel pitch has been reduced to the millimeter level, achieving
retina-level display effects on cinema screens and filling a gap in
global direct-view projection technology.
Achievements
The Company expanded the CINITY product line. By the end
of 2024, 180 CINITY cinema halls had opened domestically,
including 18 CINITY LED cinema halls and over 30 CINITY cinema
halls opened or construction in progress overseas. Following the
China Science and Technology Museum and Shenzhen Science&
Technology Museum, the Shanghai Science and Technology
Museum commenced renovation of its CINITY science cinema hall.
The CINITY LED Remastering Center has been built and put into
operation in the US.
Industry
The Company established the AI Research Institute of CFC,
approved as a Beijing Key Laboratory. The Company launched 1
key R&D project and 4 pre-research projects. Among them, the
"Film AI Dubbing System" has acquired preliminary dubbing
production capabilities and has been applied to the intelligent
multilingual dubbing of the film Chang An. The pre-research project
"Intelligent Assistant" system has completed foundational R&D.
The Company jointly established the Minority Language AI Dubbing
Joint Laboratory with Tian Shan Film Studio to vigorously expand
the application of AI dubbing technology achievements.
III. Ensuring Standardized Operation and Enhancing
Governance Effectiveness
Directors
The Company's board of directors conscientiously performs its
functions and responsibilities, and proactively plays the core role of
"setting strategy, making decisions and preventing risks". In 2024,
the board of directors actively implemented the new development
philosophy, continuously optimized the decision-making research
mechanism, strengthened investor communication and brand
building, and was selected as a "Best Practice Case for Listed
Company Boards". The Company has been rated "A" for
information disclosure by the Shanghai Stock
Exchange(hereinafter referred to as “SSE”) for 7 consecutive
years, maintaining its position as a constituent of the "SSE
Corporate Governance Index", and is the only listed company in the
film and television industry to achieve this consecutively.
The Company actively responded to independent director
reform initiatives. In accordance with newly promulgated and
revised institutional rules by the China Securities Regulatory
Commission (hereinafter referred to as “CSRC”) and the SSE, and
based on the Company's actual situation, the Company revised 10
governance policies including the Articles of Association, Rules of
Procedure for the Board of Directors, and Independent Director
Working System, and formulated the Working Rules for Special
Meetings of Independent Directors. By clarifying the responsibility
boundaries of independent directors and strengthening
performance requirements and safeguard mechanisms, the
Company better leveraged the positive role of independent
directors in decision-making participation, oversight, checks and
balances, and professional consultation.
Shareholders
The Company strictly followed the Articles of Association to
promote the responsible performance of governance bodies and
protect shareholders' legitimate rights and interests.
In 2024, the board of directors continuously advanced
corporate governance construction; the Supervisory Board and
independent directors diligently performed their oversight duties,
facilitating shareholder participation in governance decisions and
exercise of rights. There were no instances of leveraging
management's advantageous position to infringe upon the interests
of the Company or minority shareholders.
IV. Strengthening Incentives and Constraints and Unite
Development Efforts
Shares for a Long Time
China Film Group Corporation (hereinafter referred to as
"CFG") as the Company's controlling shareholder did not reduce its
shareholding in the Company in any way in 2024.
In 2024, the Company strictly implemented Guideline on
Performance Review for the Heads of State-Owned Enterprises
and relative rules, adhering to the unity of responsibility, authority,
and benefit, and combining performance with incentive and
constraint mechanisms. The annual performance evaluation
indicators for the Company's directors, supervisors, and senior
management included audited operating income, total profit, return
on net assets, asset-liability ratio, and other economic indicators.
Performance-based annual compensation was linked to annual
performance evaluation results, with compensation changes
generally matching operating performance.
The Company's directors, supervisors, and senior
management actively studied the latest regulatory policies,
participating in a total of 31 learning activities organized by the local
CSRC bureau, SSE, and China Association for Public Companies.
Through internal intraday reports, daily public opinion reports, and
monthly securities reports, they promptly understood the
Company's market value performance and market dynamics,
enabling timely response to public opinion and addressing investor
concerns.
V. Improving the Communication Mechanism and
Promoting Positive Interaction
The Company actively engaged in investor communication,
received investors for over 20 investor research surveys in 2024,
organized 5 analyst meetings, responded to 450 IR hotline calls
responded to 300 questions on the SSE E-interactive with a 100%
response rate. In 2024, the Company was selected as the "Best
Practice Case in Investor Relations Management for Listed
Companies".
In 2024, the Company held 3 performance briefings alongside
periodic reports. Led by the Chairman and attended by the Board
Secretary, CFO, independent directors, directors, and senior
management, these sessions facilitated communications with
investors and media through video Q&A, live streaming, and text
interaction. The Company was selected the "Best Practice Award
for Annual Report Performance Briefings of Listed Companies" for
three consecutive years.
Proceeding from investor needs, the Company continuously
optimized information disclosure and communication efforts. While
ensuring the truthfulness, accuracy, and completeness of disclosed
information, the Company actively responded to investor concerns
and demands, conveying the Company's value accurately. The
Company detailed operational information about the Company's
main business and industry in periodic reports and explained in
detail with industry data in temporary announcements which
involving business matters. Following announcements of significant
matters, the Company released concise explanatory articles or
video materials via new media and financial media channels to
facilitate investors' quick and intuitive understanding.
VI. Focusing on Shareholder Returns and Sharing
Development Dividends
Return Plan
The board of directors formulates shareholder return plans on
a three-year cycle. The latest plan is the China Film Shareholder
Return Plan in the Next Three Years (2023-2025) and disclosed on
the SSE website in April 2023. This plan is currently being
implemented.
Dividend
In 2024, actively responding to the "Keeping expectations
stable and Strengthening Confidence" policy, the Company
implemented two cash dividends, distributing a total cash dividend
of RMB 85.882 million (tax inclusive), accounting for 61.14% of the
net profit attributable to listed company shareholders for the period.
Since listing, the Company has cumulatively distributed cash
dividends of RMB 2.397 billion, accounting for 52.71% 1 of the
cumulative net profit attributable to listed company shareholders,
ensuring the continuity, stability, and predictability of cash
dividends.
Return Mechanism
In 2024, the board of directors solicited opinions, especially
from minority shareholders, on the frequency of cash dividends via
telephone interviews and questionnaire feedback, covering
shareholders holding 72% of the Company's total shares. For
responding to investor demands and enhancing shareholder
benefits, the board of directors proposed the first-ever interim profit
distribution plan for 2024 and the dividend has been distributed
before the 2025 Spring Festival.
The dividend payout ratio for 2018 was calculated based on net profit attributable to the listed
company's shareholders after deducting non-recurring investment gains.
Part II: Corporate Value and Return Enhancement Action Plan
in 2025
I. Deepening Reform and Innovation to Enhance
Operational Quality
The Company insists on taking creation as the core and
closely follows the requirements of high-quality development to
push forward film creation and production. At present, there are
nearly 90 projects in process of development, including nearly 50
original projects. Among them, Dead To Rights, commemorating
the 80th anniversary of the victory in the Chinese People's War of
Resistance Against Japanese Aggression and the World
Anti-Fascist War, is scheduled for release in the summer season.
The epic film The Volunteers 3, which shows the War to Resist U.S.
Aggression and Aid Korea, is planned for release in the second half
of the year. The animated film Fairizest: Rally for Pally, full of
gaming elements, will be released in the summer season. The
animation film Monkey King Rises, highlighting Eastern martial arts
aesthetics, is in production. The "China Film Youth Talents
Initiative" will also release works such as INHALE EXHALE, Wish
You Well, and Take Her Name. The Company will enhance control
over self-managed projects and strengthen film revenue
generation.
The Company will initiate distribution mechanism reform,
restructure systems and refine division of labor to further enhance
business focus and leverage professional advantages.
First, the Company will strengthen promotional investment for
revenue-sharing films and explore the cooperation models of
buyout films to activate the imported film market
multi-dimensionally.
Second, the Company will increase promotional efforts for
domestic films, promote cross-divisional collaboration, and strive
for better market performance for self-produced films.
Third, the Company will build an efficient, precise, and rapid
integrated technical service platform and strengthen the China Film
network, providing solid support and guarantee for full-chain,
multi-scenario distribution.
Cinema Management
The Company will create the China Film Cinema Management
brand, focusing on refined operations to transition cinema
investment towards a cinema management model.
The Company will strengthen centralized control, build a
professional and efficient management team, enhance the
specialization, intensification, and intelligence level of cinema
management, and boost the market competitiveness and
profitability of the Company’s film exhibition sector.
II. Driving Scientific and Technological Innovation and
Leading Industry Upgrading
Application.
The Company will increase R&D investment steadily, focusing
on the goals of "core technology localization, industrial chain
domestication, and technical standards internationalization", and
continuously strengthen R&D of high-format film technology.
The Company co-established the BUPT-China Film AI Joint
Laboratory with Beijing University of Posts and
Telecommunications to conduct in-depth research and application
of AI technology in the film and television field, building a high
ground for film AI innovation.
The Company will focus on developing acoustically
transparent LED film projection systems covering full aspect ratios
for films and documentaries (1.33:1, 1.43:1, 1.85:1, 2.39:1), with
high perforation rates and ultra-thin screen bodies, and promoting
the modular and serialized development of products.
The Company will launch multi-specification products such as
CINITY science application scenarios.
Achievements
Based on R&D achievements of high-format film standard, the
Company will develop the 3.8-meter and 5.4-meter "CINITY
HOME" for diversified scenarios s.
The Company will develop and launch the CINITY Camera
natively supporting 4K, 120fps, 12bit Raw with exclusive features
and then achieve commercialization and deploy in blockbuster films
productions.
Building on CINITY AMR (AI Master Reproduction) technology,
which enables frame rate up-conversion from 24fps to 48fps/60fps,
the Company will carry out core technology development for 60fps
to 120fps up-conversion, and further promote the achievement of
high-frame-rate mastering technology in a wider range.
III. Improving Corporate Governance and Strengthening
Performance Effectiveness
The Company continuously improves the modern enterprise
system with distinctive Chinese features, consolidating the
foundation of governance systems.
First, actively implementing CSRC’s requirements, the
Company completed revisions to 10 governance policies including
the Articles of Association and related rules of procedure in
accordance with the new Company Law and its supporting rules.
As of the announcement date of this action plan, these policies
have been approved by the shareholders' meeting and disclosed.
Second, the company revised 16 governance policies including
information disclosure and insider information management that
continuously enhance the relevance and effectiveness of
information disclosure, according to the newly revised
Administrative Measures for Information Disclosure of Listed
Companies and supporting rules. Third, the Company drafted
specialized policies such as public opinion management to further
improve the standardization, systematicness, and effectiveness of
the Company's governance system framework.
In 2025, the Company will actively implement the requirements
of the Guideline on Refining the Country's Modern Corporate
System with Distinctive Chinese Features, improving the
governance structure and operational mechanisms to lay a solid
foundation for high-quality development.
First, the Company will implement supporting institutional
reforms following the revision of the Articles of Association, further
improving systems and mechanisms and optimizing functional
allocation. Second, the Company will actively and prudently
advance the election of a new board of directors to ensure scientific
decision-making, effective governance, and orderly operations.
Third, the Company will support the “key few” to participate in the
learning and training organized by the regulatory authorities,
provide support to their effective performance and duties in legal
basis so as to enhance their governance capabilities.
When drafting this plan, the Company asked CFG about its
shareholding intention and reduction plan. CFG expressed that
based on the confidence in the company’s future development
prospects and high recognition of the company’s long-term value,
as well as in order to safeguard the rights and interests of investors
and maintain the stability of the capital market, CFG will NOT
reduce its shareholding in 2025 in any way and will hold shares for
a long time, sharing risks and benefits with the company and small
and medium-sized shareholders.
Meanwhile, the Company strictly implements the Guideline on
Performance Review for the Heads of State-Owned Enterprises
and relative rules, and establishes and improves salary
mechanisms and asset management accountability in a scientific
and reasonable way. The annual performance evaluation indicators
of the directors and senior managers of the company include
audited operating income, total profit, return on net assets,
asset-liability ratio and other economic indicators of the company.
The annual salary and performance bonus are linked to the annual
performance evaluation results, and the salary changes match the
company’s operating performance. The long-term interests of the
Company's board of directors, management, and shareholders are
aligned.
IV. Strengthening Communication and Convey Company
Value
The Company always respects and protects investors as the
starting point and goal of investor relations work. Proceeding from
investor needs, the Company continuously improves
communication mechanisms. In 2025, the Company plans to
receive no less than 20 investor research surveys, organize or
participate in no less than 4 analyst meetings, and ensure a 100%
response rate for the IR hotline/email and SSE E-Interactive
inquiries.
The Company actively implements the Opinions for Further
Improving the Quality of Listed Companies, establishing a good
communication mechanism between the board of directors and
investors.
In 2025, the Company plans to hold no less than 3
performance briefings. Led by the chairman or general manager
and attended by the board secretary, CFO, independent directors
and relevant directors and executives, the Company will
communicate with investors through video Q&A, text and other
online and offline ways, widely soliciting suggestions and opinions
from all sectors of society.
While standardizing information disclosure obligations, the
Company will continuously improve investor communication
channels and formats to actively convey Company value.
In 2025, the Company's annual general meeting utilized the
online voting reminder service provided by the SSE, facilitating
minority investor participation in corporate governance. In the
second half of 2025, the Company will participate in the "I am a
Shareholder - Visiting Listed Companies activity" hosted by the
SSE. Through site visits and on-site discussions, investors can gain
a more intuitive understanding of the Company's operations and
development, enabling better value judgments.
V. Optimizing Return Mechanisms and Sharing
Development Dividends
Dividends
The Company insists on rewarding investors with pragmatic
and effective measures, sharing long-term development dividends
with shareholders. In 2025, the board of directors will respond to
policy by fully considering the characteristics of the industry of the
company, the stage of development, strategic planning, profitability
level, and major capital arrangements for the next year and draw up
a dividend plan with an annual dividend payout rate of no less than
Mechanisms
The Company actively implements the spirit of the Several
Opinions on strengthen supervision, forestall risks, and promote
high-quality development of the capital market, enhancing the
stability, continuity, and predictability of dividends distributions.
As of the announcement date of this plan, the Company's
board of directors has submitted matters related to the 2025 interim
dividend distribution to the general meeting of shareholders for
approval and has obtained authorization for the board of directors
to execute the distribution. For details, please refer to the
Announcement of China Film on the 2024 Annual Profit Distribution
Plan and the Authorization of Medium term Profit Distribution for
decision-making progress in accordance with regulations, providing
shareholders with clear and predictable guidance.
The Company's 2023-2025 Shareholder Return Plan will be
completed by the end of this year. Based on a comprehensive
review of its implementation, the board of directors will continuously
optimize the return mechanism and formulate a new three-year
return plan.
The board of directors of China Film will continuously promote
Corporate Value and Return Enhancement Action Plan, regularly
evaluate the implementation of relevant measures, and promptly
fulfill the information disclosure obligations.
This action plan is the judgment and working idea formed by
the board of directors based on the actual situation of the company
at present. In the future implementation, it may be affected by
factors such as macroeconomic, industry policies and market
environment, and there is a degree of uncertainty. The business
plans involved in the action plan are not fait accompli but
forward-looking statements that do not constitute a substantial
commitment by the company and the board of directors to investors.
Investors are advised to pay attention to relevant risks.
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