Since QJY was listed in 2004, the gross profit margin remained at an extremely high level of 80% or above, respectively at 80.7%, 82.7% and 86.4% for FY04, FY05 and H1/06. Net margin also remained at a relatively high level of 58.9%, 62.3% and 68.1% respectively for FY04, FY05 and H1/06.
The reason behind these dreamingly high gross margins could be the unique business model that QJY adopted. QJY is basically a middleman between the TV program series investor, production houses, TV program trading companies and corporations and from its services provided to these parties, it derives either fees income or distribution rights for future benefits.
Most of QJY’s revenue comes from its TV program related services and it’s fair to assume that it’s also where most of its profits come from. QJY would search for potential investors (mainly advertising agencies) and match them with the production houses which would be the one to shoot the film/TV series. In the first half of 2006, QJY finished 60 hours of production and according to its CEO, Dr. Anita Leung in recent announcements, the total production for FY2006 would be 180 hours, implying that the second half of 2006 could provide a higher profit figure than H1.
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