Stephen Chow's Bingo Group Sells Mainland Cinema Business for HK$1 as Losses and Debt Mount

A HK$1 sale ends more than a decade in cinemas

Bingo Group Holdings, the Hong Kong listed company associated with filmmaker Stephen Chow, sold its mainland Chinese cinema business for HK$1 on 6 October 2026, ending an investment that began in 2010. The business had HK$8.6 million in unaudited net liabilities, excluding loans between group companies, at the end of August.

The transaction was completed immediately after the agreement was signed, according to Bingo Group's disposal announcement. Its wholly owned subsidiary, Lofty Shine Limited, sold all the shares in Bingo Cinema Investment Company Limited to an individual whom the directors identified as an independent third party.

Bingo expects to record an accounting gain of approximately HK$5.4 million, subject to audit. The cash purchase price is still just HK$1. The financial benefit comes chiefly from removing the subsidiary from the group's accounts and ending its exposure to an operating business that continued to lose money.

The exit follows the September closure of a Bingo cinema in Hangzhou that had operated for 15 years. Bingo's annual report had identified a single remaining cinema in the city at 31 March 2026. The disposal announcement states that, following completion, the group no longer operates any cinema business.

Chow remains connected to Bingo as an executive director and major shareholder. The sale changes the company's business rather than ending its involvement in entertainment: filmed entertainment, new media and licensing remain, with new media already generating far more revenue than cinema operations.

The decision also comes against a wider financial strain. Bingo's revenue nearly quadrupled in its latest financial year, yet its annual loss increased and its auditors flagged uncertainty about its ability to continue operating.

What exactly changed hands?

Bingo Cinema Investment Company Limited is a Hong Kong investment company incorporated on 8 July 2010. The sale covers 100% of its issued shares, together with control of the subsidiary businesses beneath it that principally operated cinemas in mainland China.

Lofty Shine, the seller, is incorporated in the British Virgin Islands and remains wholly owned by Bingo Group. By selling the investment company rather than individual cinema assets, Bingo transferred ownership of the corporate business in a single transaction.

The buyer is described in the announcement as an individual independent of Bingo and its connected persons under Hong Kong listing rules. The announcement gives no name or plans for the acquired business. The transaction has already closed, so no future completion date is pending.

Bingo classified the disposal as a discloseable transaction under Chapter 19 of the GEM Listing Rules. The applicable measures of the transaction's size exceeded 5% but were below 25%, triggering reporting and announcement requirements. GEM is the Hong Kong exchange market on which Bingo trades under stock code 8220.

Why a HK$1 price can produce a HK$5.4 million gain

The business being sold had more liabilities than assets. At 31 August 2026, that gap was approximately HK$8.6 million, before including loans between companies within the group. A buyer taking ownership of such a company receives its business together with its financial obligations.

Bingo will stop combining the subsidiary's financial results with its own. This process, known as deconsolidation, can produce an accounting gain when a subsidiary with net liabilities leaves a group. Bingo estimates the gain attributable to its owners at HK$5.4 million; the final amount remains subject to its auditors' review.

The HK$8.6 million net liability figure and the HK$5.4 million expected gain are different accounting measures. The announcement gives both, without a detailed reconciliation between them. The purchase price of HK$1 is the cash consideration, and Bingo says that money is intended for general working capital, meaning everyday operating needs.

Bingo's board explained its expected financial benefit in the disposal announcement:

The Disposal will strengthen the cash flow of the Group, which allows the Group to improve its liquidity and to reallocate its resources to other existing opportunities.

The practical benefit therefore lies in reducing the need to support the cinema business and freeing management attention and resources for the remaining operations.

Cinema losses narrowed, but ticket revenue kept falling

The sold business recorded audited revenue of HK$2.251 million in the year ended 31 March 2026, down from HK$2.747 million a year earlier. That was a decline of approximately 18.1%, or HK$496,000.

Its operating loss improved from HK$2.543 million to HK$1.2 million, a reduction of approximately 52.8%. Even after that improvement, the annual operating loss was equivalent to about 53% of revenue. The business was losing money on a substantial scale relative to its sales.

Bingo's 2025/26 annual report provides a closer view of the cinema's economics. Revenue of HK$2.251 million less direct expenses of HK$951,000 left gross profit of HK$1.3 million. Those direct expenses mainly represented payments sharing revenue with film providers.

Gross profit is the amount left after specified direct costs, before other operating expenses are deducted. A cinema can therefore report positive gross profit while still making an operating loss once the rest of its costs are counted.

The annual report recorded fixed cinema lease payments of HK$617,000 in 2026, compared with HK$612,000 in 2025. Rent alone was equivalent to approximately 27.4% of cinema revenue. Its lease also contained a payment linked to 13% of net sales, alongside a minimum annual payment; the accounts recorded no variable payment for the year.

Bingo attributed weak cinema revenue to unsatisfactory conditions in China's film market. It also cited mainland economic growth below its expectations and changes in how films and television dramas are distributed and watched.

How the cinema retreat unfolded

Chow joined Bingo as an executive director in June 2010, when the company was building an entertainment business around film production and cinema investment. Its cinema investment subsidiary was incorporated the following month.

The group's remaining Hangzhou venue had operated for 15 years before a closure notice issued on 24 August 2026 said its lease was expiring. The notice set 25 September as the date operations would stop and included arrangements to register refunds for membership cards.

• June 2010: Stephen Chow joined Bingo Group as an executive director.
• 8 July 2010: Bingo Cinema Investment Company Limited was incorporated in Hong Kong.
• 31 March 2026: Bingo's annual report recorded one remaining cinema, located in Hangzhou.
• 24 August 2026: The Hangzhou cinema issued a closure notice citing the expiry of its lease.
• 25 September 2026: The announced closure took effect.
• 6 October 2026: Bingo signed and completed the HK$1 sale of its cinema investment subsidiary.

Bingo had still been reviewing the viability of cinemas when it prepared its annual report, examining ticket sales and customer activity in several cities. By October, it had moved from assessing the business to leaving it entirely.

New media now dominates Bingo's sales

Bingo's cinema business accounted for just 4.8% of group revenue in the year ended 31 March 2026. A year earlier, its share had been approximately 22.7%. The change reflects both declining cinema sales and rapid growth elsewhere in the company.

Group revenue rose from HK$12.114 million to HK$47.383 million, an increase of approximately 291%. Revenue from filmed entertainment, new media and licensing combined reached HK$45.132 million, compared with HK$9.367 million in the previous year.

New media revenue increased from HK$6.671 million to HK$41.68 million, accounting for approximately 88% of total group sales. Licensing revenue rose from HK$2.696 million to HK$3.452 million.

The annual report identifies Xingfeng and Xingyu, two new media businesses launched during the financial year, as contributors of approximately HK$37.8 million in revenue. Together, they generated nearly 80% of Bingo's total turnover.

Those figures show that the company's commercial centre had already shifted before the cinema sale. The disposal removes a small and shrinking source of revenue while leaving Bingo dependent on the newer activities responsible for most of its growth.

The move includes services and artificial intelligence

Bingo's expansion beyond cinemas includes project management, copyright services and an investment in artificial intelligence. These activities provide a more specific picture of its direction than a simple return to making films.

Its wholly owned subsidiary High Art Limited entered into a project management service agreement with Jumoon Group on 4 October 2024. A supplementary agreement followed on 5 March 2025, and shareholders approved the arrangement at an extraordinary general meeting on 6 June 2025.

The services covered project management, copyright management and communication coordination. They place part of Bingo's work in managing entertainment projects and rights rather than operating venues that sell tickets.

In May 2025, another subsidiary completed an investment giving Bingo a 12% interest in Hangzhou Jiyi Artificial Intelligence Technology Company Limited. That company owns the Xingyi model for artificial intelligence generated content, initially developed with support from Kingnet Network.

Artificial intelligence generated content refers to material such as text, images or video produced using AI systems. Bingo's investment connects it to technology used in content creation, although the annual report gives no separate profit contribution for that holding.

Strong revenue growth has not ended financial pressure

Bingo lost HK$26.026 million in the year ended 31 March 2026, compared with HK$23.262 million a year earlier. The loss increased by approximately 11.9%, even as revenue rose sharply.

The group's balance sheet also weakened. Net liabilities increased from HK$31.723 million to HK$52.921 million. Net current liabilities, the gap between obligations due within a year and assets expected to be available within that period, rose from HK$32.144 million to HK$64.144 million.

Cash and cash equivalents fell from HK$40.226 million to HK$29.403 million. Operating activities used HK$2.033 million in cash, compared with generating HK$27.72 million in the previous year.

Bingo's auditors identified a material uncertainty that could cast significant doubt on the group's ability to continue as a going concern. In everyday terms, they flagged uncertainty about whether it could keep operating and meet its obligations. Their audit opinion was not modified in respect of that matter.

The cinema disposal addresses one part of this pressure. Its expected HK$5.4 million accounting gain is modest beside the group's HK$52.921 million net liability position at March, and the HK$1 price provides almost no fresh cash. Bingo's financial position will depend heavily on whether its remaining operations can turn growing sales into earnings and cash.

What the exit changes for Chow's company

Chow remains an executive director, alongside his sister Kelly Chow Man Ki and other board members. A July company disclosure put the combined holding of Chow and parties acting in concert with him at 61.89%, giving that shareholder group a controlling position.

The sale ends Bingo's role as a cinema operator while preserving its involvement in entertainment production, rights and new media. For customers of the closed Hangzhou cinema, the immediate change was the loss of a local venue and the need to deal with membership refunds. For Bingo, it is the removal of an operation whose revenue had become small but whose losses continued.

The group's experience also shows why a famous filmmaker's name and the economics of a cinema are separate commercial matters. Bingo's accounts record payments to film providers, rent and other operating costs that must be covered from a limited stream of ticket and related sales.

By selling the business after its final venue closed, Bingo has made a definitive retreat from physical exhibition. Its next financial results will show the company without cinema operations and provide a clearer view of how its much larger new media activities perform.

Key Points

• Bingo Group completed the sale of its mainland cinema investment subsidiary for HK$1 on 6 October 2026.
• The sold business had approximately HK$8.6 million in unaudited net liabilities, excluding intercompany loans, at 31 August.
• Bingo expects an accounting gain of about HK$5.4 million, subject to audit; the cash purchase price was HK$1.
• Cinema revenue fell 18.1% to HK$2.251 million in the latest financial year, with an operating loss of HK$1.2 million.
• The remaining Hangzhou cinema announced closure from 25 September after its lease expired.
• New media generated approximately 88% of group revenue, but Bingo's annual loss still widened to HK$26.026 million.
• The group no longer operates cinemas and retains filmed entertainment, new media and licensing businesses.