Former Bruce Lee Studio, Orange Sky Golden Harvest Is Worth Less Than $20 Million as Group Issues Fourth Profit Warning in Two Years

As someone who has always admired the resilience and adaptability of the film industry, I find myself deeply saddened by the current predicament of Orange Sky Golden Harvest (OSGH). Once a titan that helped establish the legend of Bruce Lee and revolutionized cinema in Southeast Asia, it is now grappling with deepening losses and a shrinking market capitalization.

goldenharvestfilmstudio’s spinoff, Orange Sky Golden Harvest, which launched the career of martial arts legend Bruce Lee, has issued a caution to investors about mounting financial losses. This is the fourth such warning from the company over the past two years.

I’ve been awestruck by the journey of this company. Once deeply rooted in Lee’s vision, it has now expanded its horizons and proudly stands as the biggest cinema chain in Singapore. But that’s not all; its presence extends to other cinemas in Taiwan and Hong Kong as well.

For the six months to June, management warns that losses may increase from HK$25 million ($3.2 million) to as much as HK$100 million. It blames impairment losses and a reduction in operating profits. That may be a further sign that cinema box office is struggling to recover in East Asia’s more mature economies, where OSGH is focused.

On Friday, the company’s individual shares were trading at HK$0.051 each, which has brought their total market value to approximately HK$151 million, or around $19.3 million.

Back in 1993, during the twilight of Hong Kong’s golden era of filmmaking and prior to the territory’s handover from British rule to China, a significant shift occurred. Golden Harvest, a pioneer in the industry, sold its entire film library to STAR-TV. The next year, they managed to rake in an impressive $29 million through an Initial Public Offering (IPO), using the funds to establish cinema chains across Southeast Asia. Today, the library is under the ownership of Fortune Star.

Goldon Harvest, headquartered in Hong Kong, ventured into Singapore by forming a partnership with Village Roadshow initially. They also established two cinema chains in Malaysia and further expanded into Taiwan, where they are currently a minor stakeholder in the dominant cinema chain, VieShow.

In 2004, the company Golden Harvest was purchased by a Chinese entrepreneur named Wu Kebo, who subsequently combined it with his entertainment agency Orange Sky to form a new entity known as Orange Sky Golden Harvest.

The timing of Wu’s venture to establish a large network of cinemas in China seemed apt, considering the swift growth of the Chinese film industry. Moreover, the company ran an innovative and profitable multiplex in Shenzhen. However, profits have been elusive, leading to the sale of the China cinema chain in 2017 for $575 million to Dadi.

After that incident, OSGH successfully resisted an attempt to acquire its 50% ownership in Singapore’s Golden Village. In the year 2017, they opted to purchase their Singaporean business partner for a sum of $129 million instead.

As a dedicated enthusiast, I too aspired to bring our collective back to the heart of China, focusing on establishing stages for live entertainment. The inaugural venture, situated in Suzhou, made its grand debut in 2023, amidst the ongoing pandemic. Interestingly, our 2023 annual report unveiled that the China unit, within our organization, faced significant challenges, with losses amounting to a staggering HK$37 million that overshadowed their relatively modest HK$12 million in earnings.

Earlier in March, I found myself compelled to issue a clarification regarding unverified rumors circulated by Bloomberg, suggesting that the leadership at OSGH was engaged in negotiations for the sale of our cinema chains in Singapore, Hong Kong, or Taiwan. However, I’m pleased to confirm that these reports were unfounded.

As a film enthusiast, I’d like to set the record straight: though we’re always on the lookout for promising strategic moves that could boost our collective efforts, there’s currently nothing in the works regarding the sale of any of our businesses.

Although the box office revenue increased by 15% during 2023, signifying a recovery from the COVID-19 era’s lows, OSGH still incurred significant losses totaling HK$90 million, which equals approximately $11.5 million.

2024-08-16 11:48

Former Bruce Lee Studio, Orange Sky Golden Harvest Is Worth Less Than $20 Million as Group Issues Fourth Profit Warning in Two Years

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