This is also called Red Lotus Temple On Fire. It has a simple plot that mostly makes sense and characters who are readily distinguishable, so it's fairly easy to follow. The main problem for me - I watch Chinese movies like this mainly for the martial arts and this has almost none. The main fighters are magicians and attack one another by means of beams of light and other similar effects. Since the quality of these old special effects is uniformly poor, I didn't find the action that entertaining.
The monastery has been captured by bandits, who are posing as monks in order to kidnap and abuse young women who come to pray. An inspector is sent to investigate, the bandits decide to eliminate him, various factions of magicians get involved on each side and this is simply the story of the battle between them. All seems lost when a powerful young witch is sent to aid the bandits and easily overpowers all the good guys - but then she falls in love with the handsome inspector and things get more complicated. The ending is disappointing, with the fates of the various villains not that clear, but I did enjoy the twist in the final 30 seconds!
The best thing here is a fun performance by the arrogant, powerful and flippant young witch, but I can't figure which of the actresses this was, possibly Violet Pan Yingzi. The acting and script aren't great and there's no big reason to watch this, with lots of better options out there - try the excellent Story in Temple Red Lily for another film which cashes in on the 1928 classic of this title.