Stock Code: 600977 Stock Name: China Film
China Film Group Co., Ltd.
Corporate Value and Return Enhancement Action Plan
April 2026
China Film Group Co., Ltd.
Corporate Value and Return Enhancement Action Plan
In order to actively respond to and implement the initiative of the
Shanghai Stock Exchange's (hereinafter referred to "SSE") Corporate
Value and Return Enhancement Action (hereinafter referred to "the
Action"), China Film Group Co., Ltd. (hereinafter referred to "the
Company" or "China Film Group") released the "China Film Group Co.,
Ltd. Corporate Value and Return Enhancement Action Plan 2024
Assessment Report and 2025 Action Plan" on July 1, 2025. The Company
regularly reviewed the progress and effectiveness of the plan's
implementation, and released the " China Film Group Co., Ltd. Corporate
Value and Return Enhancement Action Plan 2025 Interim Evaluation
Report" on August 27, 2025.
In 2025, the Company thoroughly implemented the spirit of the 20th
National Congress of the Communist Party of China and the guiding
principles from the plenary sessions of the 20th Central Committee,
promoting the implementation of the Action, achieving good results in all
areas of work. Based on a comprehensive assessment of the 2025 execution,
and considering the Company's development stage, industry characteristics,
and investor demands, the Company has formulated China Film Group Co.,
Ltd the Corporate Value and Return Enhancement Action Plan in 2026 as
follows.
Part I: Assessment Report of Corporate Value and Return
Enhancement Action Plan in 2025
I. Deepening Reforms and Innovations to Improving Operational
Quality
In 2025, the Company produced and released 39 films, accounting for
productions occupied 5 spots in the annual top 10 box office rankings and
won over 151 domestic and international awards, including China Film
Huabiao Awards and China Film Golden Rooster Awards.
Released during the summer season, the film Dead To Rights
commemorated the 80th anniversary of the victory of the Chinese People's
War of Resistance Against Japanese Aggression and the World Anti-Fascist
War. With a mournful yet restrained cinematic lens, it forged a national
consensus of taking history as a mirror and creating the future and achieved
a domestic box office of over RMB 3 billion and an overseas box office of
nearly US$5.5 million, winning the summer box office championship. The
film The Volunteers: Peace at Last fully demonstrated the indomitable faith
and courage of the Chinese people, making historical memory deeply
moving. The film won the National Day holiday box office championship,
topped the audience satisfaction survey and brought the "Volunteers"
trilogy to a perfect conclusion.
The Company advanced reforms to its distribution mechanism and
reinforced its professional competitive strengths through a renewed
distribution matrix. The Company established a new branch, CFG
Imported Distribution, to further invigorate the market for imported films.
It also strengthened coordination between content development and
distribution, improving the precision and effectiveness of release and
publicity campaigns. At the same time, it enhanced the CFG network
transmission and built a highly efficient and responsive distribution
platform to support full-chain distribution across multiple scenarios. In
addition, it integrated its non-theatrical distribution business to develop
new market segments. In 2025, the Company distributed a total of 616
films, with settled box office reaching RMB 36.6 billion, representing 78%
of the national box office. The film Zootopia 2 set a new record with 109
million admissions. The CFG network transmission covered nearly 10,000
cinemas nationwide, with delivery time for each film kept within two hours.
Screenings at campuses, communities and military units also achieved
positive results.
Management
To enhance the comprehensive competitiveness of its controlled
cinemas, the Company comprehensively reviewed their assets and
operation systems, strengthened unified management, and innovated
characteristic operations. In adherence to terminal quality upgrading
strategy, the Company comprehensively promoted the special hall
transformation of controlled cinemas through the adoption of the CINITY
system, thereby providing a superior viewing experience. Furthermore, the
Company developed a range of distinctive exhibits, merchandise, and
activities. These initiatives not only created differentiated competitive
advantages but also provided audiences with diversified experiences,
contributing to a more robust and varied business model.
By the end of 2025, the cinema chains and theaters in which the
Company held controlling or minority stakes covered 25,818 screens and
over 3.1946 million seats nationwide, with a market share of 31.26% in
screen numbers. The Company operated 121 controlled cinemas with 914
screens In 2025, it achieved an average per-screen revenue of RMB
II. Promoting Technological Innovation and Driving Industrial
Upgrading
Application
The Company has completed multiple key tasks under the National
Key R&D Program, Systematic Research, Development, and Application
of Key Technologies in the Whole Cinema Industrial Chain for High-
Format Films. The project outcomes were awarded the First Prize of the
Science and Technology Progress Award by the China Society of Motion
Picture and Television Engineers in 2025. As of the reporting date, the
Company has accumulated a total of 540 film technology-related
intellectual property rights.
The newly launched CLED products in the 10-meter, 20-meter, and
number of world-first milestones in the field of high-end film projection.
Within the domain of giant-screen LED acoustically transparent screens,
the Company's products feature the industry's highest aperture ratio and
thinnest panel thickness, delivering faithful restoration of cinema-grade
audio quality through LED screens. The CINITY Camera — the
Company's proprietary cinematographic camera — has completed R&D
and testing. Supporting native 4K, a base frame rate of 120fps, and a
CINITY-exclusive color space, the camera is now ready for deployment in
on-set production of major motion pictures.
Technological Achievements
As of the end of 2025, a total of 248 CINITY cinema halls had
commenced operations domestically, including 67 CLED cinema halls,
while 26 CINITY cinema halls had either opened or were under
construction overseas. Cumulatively, a total of 466 films had been
produced in the CINITY version, of which 72 were high-frame-rate titles.
During the theatrical run of Avatar: Fire and Ash, CLED cinema halls
ranked first among all premium large-format venues nationwide, recording
an average of 128 patrons per screening and an occupancy rate of 40.6%.
CINITY Science has been installed and made operational in five science
and technology museums across the country. Notably, the CLED giant-
screen cinema hall at the Shanghai Science and Technology Museum,
which opened in January 2026, is now recognized as the world's largest
CLED giant-screen cinema.
III. Improving Corporate Governance and Strengthening
Performance Responsibilities
The Company continuously improved the modern enterprise system
with distinctive Chinese features, consolidating the foundation of
governance systems. In 2025, actively implementing the requirements of
the China Securities Regulatory Commission (hereinafter referred to
"CSRC") and the SSE, the Company completed the revisions to 25
governance policies including the Articles of Association and the China
Film Group Information Disclosure Management System in accordance
with the new Company Law, the newly revised Information Disclosure
Management System and supporting rules. The Company formulated and
disclosed specialized policies such as the Public Opinion Management
Rules to further improve the standardization, systematicness, and
effectiveness of the Company's governance system framework.
In 2025, the Company completed board election and formed the
fourth session of the Board of Directors through legal procedures. The new
board achieved an organic balance and complementary advantages in terms
of industry experience, professional background, and diverse perspectives,
providing solid support and guarantee for the scientific decision-making of
the board. Having thoroughly implemented the spirit of the new Company
Law, the company completed the governance mechanism reform,
systematically integrating the various supervisory responsibilities
corresponding to the Board of Supervisors into the actual workflow and
daily operating norms of the Audit Committee. In order to implement the
governance requirements of Central Cultural Enterprises, the company
established the Art Committee for the first time, which provides high-end
intellectual resources and professional support into films creation and
talent pipeline development.
In 2025, the controlling shareholder expressed confidence in the
Company’s future development prospects and, in support thereof, did not
reduce its shareholding in 2025 in any way, sharing risks and benefits with
the company and small and medium-sized shareholders. Meanwhile, the
Company strictly implemented the Guideline on Performance Review for
the Heads of State-Owned Enterprises and related rules, and established
and improved salary mechanisms and asset management accountability in
a scientific and reasonable way. 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 actively engaged in investor communication. In 2025,
the Company received over 10 investor research surveys, participated in 5
analyst meetings, handled over 530 calls on the IR hotline and maintained
a 100% response rate on the SSE E-Interactive inquiries. In 2025 the
Company was selected as the "Best Practice Case in Investor Relations
Management for Listed Companies".
In 2025, the Company held 3 performance briefings alongside
periodic reports. Led by the Chairman and attended by the Board Secretary,
CFO, independent directors and relevant directors and vice presidents,
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 four consecutive years.
In 2025, the Company's annual general meeting and extraordinary
general meeting utilized the online voting reminder service provided by the
SSE, facilitating small and medium-sized shareholders participation in
corporate governance. In October 2025, the Company participated in the
“I’m a Shareholder” activities hosted by the SSE and invited over 40 small
and medium-sized shareholders to site visits and face-to-face discussions
with company’s directors that investors could intuitively experience and
understand the company's business progress, cultural atmosphere, and
technological innovation achievements that enhance recognition of the
Company's value.
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 July 2025, the Company implemented the 2024 cash
dividend (the interim profit distribution was completed in January 2025),
distributing a total cash dividend of RMB 85.882 million (inclusive of tax),
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 2.418 billion 1, accounting for 54.05%of
the cumulative net profit attributable to listed company shareholders, a
relatively high level in the market.
The China Film Group Shareholder Return Plan for the Next Three
Years (2023-2025) was fully implemented by the end of 2025, with all
planned matters properly executed. To maintain the consistency,
reasonableness, and stability of the dividend policy, based on a
comprehensive review of past implementation, the Board of Directors has
formulated the China Film Group Shareholder Return Plan for the Next
Three Years (2026-2028), which specifies the conditions for cash dividend
implementation, specific ratios, and decision-making procedures. It was
disclosed on the Shanghai Stock Exchange website in April 2026.
Part II: Corporate Value and Return Enhancement Action
Plan in 2026
I. Focusing on High-Quality Creation and Contributing to
Market Prosperity
Adhering to the principle of balancing guidance with innovation, and
historical depth with genre exploration, the Company is committed to
creating high-quality works that unify both social benefits and economic
returns. The sci-fi blockbuster The Wandering Earth 3 is about to wrap up
filming and will be released in two parts, with Part 1 scheduled for the 2027
Chinese New Year. Infinite War, a film centered on the theme of the 100th
anniversary of the founding of the People's Liberation Army, will start
shooting soon, using futuristic war anticipation to showcase the spirit of
the people's army in overcoming difficulties. Centering on the 50th
anniversary of the country’s reform and opening?up, the Company will
develop I Am Not Van Gogh and The Genius Translator, which explore the
resonance between individuals and their times against the backdrop of the
reform and opening-up era and the ongoing struggle of the new age.
Furthermore, the Company will step up efforts in creating films of diverse
genres, such as biopics, workplace comedies, and suspense thrillers.
The Company will integrate film creation and talent pipeline
development. Based on the practice of the first round of China Film Group
Youth Talents Initiative, the company will launch the second round
investment plan. Adhering to the principles of low-budget, high-quality,
and distinctive features, the company will establish a number of niche-
focused and differentiated studios and nurture original projects.
Furthermore, the company will actively explore the application of AI
across the entire creative field, gathering proficient AI practitioners among
the new generation.
II. Adhering to Innovation-Driven Development and Leading
Industrial Development
In alignment with the National Key R&D Program, the Company will
advance the research and development of technologies and processes
related to high-format films, promoting the deep integration of scientific
and technological innovation with industrial innovation. The Company
will continuously refine its CINITY product series, strengthening the
competitiveness of its industrial and supply chain. The Company will
further expand the market share of CINITY and CLED systems in both
domestic and international exhibition markets, while enriching the supply
of CINITY-exclusive versions of domestic and imported films. The
Company will drive the research, development, and commercialization of
the CINITY-X system to meet audience needs across diverse sectors and
application scenarios. In addition, the Company will advance its AI R&D
initiatives and accelerate their market-oriented commercialization.
The Company will not only explore and deepen the main distribution
channels but also establish specialized distribution mechanism, which
focus on science popularization, re-releases, and youth talents, in order to
cultivate niche markets by differentiated strategies. The Company will
continuously enhance the digital service capabilities of the Company’s
network transmission, providing robust support for the expansion,
innovation, and efficiency improvement of the film market. The Company
will enrich the supply of Pre-Booked Screenings and Cinema Live
Streaming and diversify screening scenarios, such as in secondary film
market or in Film-Integrated Market Tour. The Company will implement
characteristic cinema operations, enrich multi-service offerings, and
promote the transformation of cinemas into diverse cultural and
entertainment consumption spaces.
III. Improving Corporate Governance and Strengthening
Performance Responsibilities
The Company continuously improves the modern enterprise system
with distinctive Chinese features, consolidating the foundation of
governance systems. First, actively implementing Code of Corporate
Governance for Listed Companies by CSRC, the Company revised the
Remuneration Management Rules for Directors and Senior Management,
clarifying remuneration structure, performance assessment, remuneration
payment, and clawback provisions that to better ensure the Company's
sustainable development and long-term value creation. Second, for
improving the internal control system and enhancing risk prevention and
control capabilities, the Company revised specialized policies such as the
Regulation on External Guarantees. Third, the Company officially
implemented the Public Opinion Management Rules that improve
mechanisms for consultation, judgment, and coordinated response and
enhance reputation management and public opinion response capabilities.
The Company's board of directors proactively plays the core role of
"setting strategy, making decisions and preventing risks" to build a solid
foundation for high-quality development. First, the Company optimizes
specialized committee, establishing the Science and Technology Advisory
Committee, and improve the differentiated positioning of specialized
committees for prior study and professional advisory committees for
promoting development that better support the scientific and effective
operation of the Board. Second, the Company improves the synergy
mechanism of internal control, compliance, and risk control, strengthening
the respective responsibilities and collaboration of business units, risk
control departments, and audit departments. The Audit Committee and
Independent Directors play supervisory roles to build three robust lines of
defense for major risk management. Third, the Company strengthens brand
reputation management, promotes the integrated deployment and
simultaneously implementation of brand strategy and corporate strategy,
and deepens understanding and recognition of the company across all
sectors of society.
When drafting this plan, the Company asked the controlling
shareholder about its shareholding intention and reduction plan. The
controlling shareholder 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, the
controlling shareholder will NOT reduce its shareholding in 2026 in any
way and will hold shares for a long time, sharing risks and benefits with
the company and small and medium-sized shareholders. The company will
promote the controlling shareholder's awareness of compliance and
enhance the performance capabilities of directors and senior management,
promptly conveying the latest regulatory policies and compliance
requirements, effectively building a solid foundation for the company's
standardized operation and scientific decision-making.
IV. Strengthening Communication and Conveying 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 2026,
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 2026, the Company plans to hold no less than 3 performance briefings.
Led by the chairman or president and attended by directors and vice
presidents, 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 2026, the Company's will utilize the
online voting reminder service provided by the SSE, facilitating minority
investor participation in corporate governance. The Company will further
enrich the forms of activities such as “China Film Group Open Day” and
collaborate with financial media to produce special programs, allowing
investors to gain timely and in-depth insight into the Company.
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. As of the announcement date of this action plan, the Board
of Directors has submitted matters related to the 2025 dividend distribution
to the general meeting of shareholders for approval, proposing to distribute
a cash dividend of RMB 59.744 million (including tax), accounting for
listed company for the current period. In 2026, the board of directors will
fully consider 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 40% (including interim and annual
dividends) as the benchmark.
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. The Company strictly will
implement the China Film Group Shareholder Return Plan for the Next
Three Years (2026-2028). During the formulation of profit distribution
plans, the Company strengthened communication with small and medium-
sized shareholders, fully listening to their opinions and demands. When
conditions for cash dividends are met, the company will prioritize cash
dividends for profit distribution, ensuring the continuity and stability of the
dividend policy and safeguarding the legitimate rights and interests of
shareholders and investors.
The board of directors of China Film Group 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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