Imagi International Soh Szu WeiFor the nine months ended 31 December 2011, Imagi International (0585), which engages in production of animation and comics, recorded a turnover of HK$117 million. In the next two to three years, Imagi will also secure a contract from Disney of a minimum amount of HK$105.9 million. Imagi has smoothly transformed in an elegant manner, parting from the old Imagi. Soh Szu Wei, executive director and chief executive officer of Imagi International, said when he was interviewed by our website, that after Toon Express Group successfully merged with Imagi and Toon Express, Pleasant Goat and Big Big Wolf, two cartoon characters, have brought encouraging income contributions to the company. The success of Pleasant Goat and Big Big Wolf movie series is extremely delighting to the management and shareholders.

So how come the present Imagi is so much different from the old Imagi? The old Imagi, who was dedicated to working on animations with licenses in others’ hands, assumed a passive role in the process of animation production. The present Imagi focuses on creating animations of self-owned brands and takes up an active role during the whole production process. Soh said when old Imagi produced the “Astroboy” movie, the expenditure reached US$30 million – US$50 million at conservative estimate. Furthermore, the revenue stemming from movie-related products fell into the pocket of the Japanese firm. The long-term revenue generated from a movie is limited without the substantial income beyond box office revenue, he said. Therefore, the present Imagi forged a platform that develops lifestyle, media as well as entertainment products. In fact, humans and animals share a vast number of similarities. From a marketing perspective, people fall in love with Pleasant Goat and Big Big Wolf mainly due to “varieties in appearances of characters” and “varieties in dispositions of characters”, which enable children to assimilate themselves to one of the eight major characters and laugh joyfully together with their parents. For children who have a lazy disposition, they are most likely to favor Lazy Goat and Slow Goat. For girls who have a kind heart and cares about beauty, they probably would become fans of Pretty Goat. The situation for Pleasant Goat and Big Big Wolf is different from Hollywood’s heroic films like Spiderman, Batman and Superman, which box office revenue counts on the preference of audience towards a single leading character.

Except in Mainland China, distribution rights for the televisions series and movies of Pleasant Goat and Big Big Wolf belong to Disney, who also gets the licensed marketing rights for related movie products. Soh said, in response to the serious issue of intellectual property rights infringement in Mainland China, that any famous thing in China would face the problem of piracy, adding even Disney is killing brain cells to fix the issue. The most effective way is to carry

out legal action against the pirates, a move that can threaten the bold infringement of intellectual property rights, he said. As such, Imagi adopts this means to tackle piracy issue in China with a view to protecting the interests of the group. The collaboration between Imagi and Disney benefits a number of parties, he said. All the products bear the Disney trademark, which is a good way to tell the market Imagi’s products are of international standard just as those of Disney, Soh said, adding parents would feel safe to buy Imagi’s products. Management of Imgai plans to produce at least 220 to 300 episodes of cartoon television series every single year, of which half would belong to the Pleasant Goat and Big Big Wolf series. As to movies, the management hopes to produce four movies every five years. Besides Pleasant Goat and Big Big Wolf, another cartoon television series named “Happy Family” will be turned into movie in order to provide children and parents with educational cartoon televisions series and movies.

Soh deems that local production costs are climbing gradually especially due to sharp increases in wages in recent years. On the contrary, undertaking creative industry business in Mainland China would possess relative advantages, he said. In order to further increase the competitiveness of Imagi International, Soh frankly admitted he intends to acquire firms from the following three categories: 1. Firms with high technology and engaged in high quality of technology research; 2. Firms with cutting-edge visual technology; 3. Firms with deep and broad distribution channels. Information reveals that there are 6,000 firms, small and large, in Mainland China undertaking animation and comics businesses. If each firm has five brands,there are a total of 30,000 registered brands. Fortunately, market demand for high-quality comics is ever increasing at a compound annual growth rate of 30%. Taking the angle of an investor, Soh is sure Imagi International (0585) is a successful corporation that has withstood the test of market. Shares of Imagi International have their investment value as Imagi’s products can at least remain popular and there is brand continuity, he added.