Create your characters. Write a page of biography for each major character beforehand and at least a paragraph for your incidental characters. Kung Fu movies revolve around three major characters: the young hero who thinks he can be a Kung Fu master (a variant is the disgraced martial artist looking for redemption); his wise mentor who patiently guides him through training (and who may have been defeated by the evil master sometime in the past); and an arch villain who leads a gang of vicious thugs and appears to have unbeatable mojo.
Build a backstory. A sense of history is important to Kung Fu movies to convey the context of the young hero's emergence. Usually the hero is the black sheep of a martial arts family who have fallen on hard times because of the arch villain, or a disgraced martial artist looking for redemption. The backstory should be reflected in the setting you choose for the movie storyline.
Establish your setting. The setting can be urban or rural, but a central setting is often built around the family business (often a dojo, a healing clinic or a store). Look for a setting that where gangs or clans can thrive and with locales big enough for large fight scenes. You don't have to be too original; kung fu movies are expected to adhere to the formula.
Outline your movie. The Kung Fu formula follows three rigid acts: In act one the evil master disrupts the town and disgraces the hero, who isn't up to the challenge; in act two the hero pledges loyalty to a good Kung Fu master but consistently fails his training; in the final act the hero masters a key technique and challenges the evil master and defeats the evil master in one-on-one combat. Don't worry too much about plot twists; with these movies formula is everything.
Type your script in screenplay format. Keep the script to 80 minutes (about 80 pages). Kung Fu movies are short and intended to deliver a punch. If you go longer than 80 pages, you need to cut some scenes.