In February 2006, the Group entered into two joint venture agreements with a provincial television station for a term of 20 years which engaging HuaGuang in a TV channel operation starting in May 2006, including content management, advertising sales and program production. Pursuant to the joint venture contracts, the provincial television station provides the exclusive use of a television channel, including production resources and equipment, while outsourcing its entire advertising time slots into the two joint ventures for an initial term of five years.

Guizhou Guishi Digimedia Advertising Company Limited, the Group owns 51% interest, serves as the exclusive advertising agent to manage TV commercials. Guishi Huaguang Media Company Limited, the Group owns 49% interest, is responsible for sourcing and producing content, as well as schedule planning. Currently, over 100 professional and experienced staff are working on production, planning and scheduling, contents sourcing where the channel is focusing on fashion, entertainment, lifestyle and sports, 24 hours a day.

In the television program production and related content management services arena, the Group has invested in two television dramas production with total of 60 episodes, “The Story in a Small Town” and “XiGuan Affairs”.

While there is limited supply of quality television programs in China, the Group will carry on investing more resources in the production of television programs and drama to aggregate buying power to enhance competitive edge, and vertically integrate and consolidate our business in contents management.

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