Huayi Brothers inks an 18-film co-financing and distribution venture with STX Entertainment. (Photo : www.wantchinatimes.com)
Huayi Brothers Media Corp's share price rose to the daily limit Wednesday following confirmation that China's leading entertainment company would be receiving investment from Alibaba Group Holdings and Tencent Holdings, reported the Global Times.
According to Huayi Brothers' Wednesday filings with the Shenzhen Stock Exchange, Alibaba's Jack Ma, Tencent's Ma Huateng, along with a subsidiary of Ma Mingzhe's Shenzhen-based insurance company Pingan, have bought shares for a combined total investment of 3.6 billion yuan ($588 million).
As gathered by Want China Times, of the 145 million A-share stocks announced at the Nov. 18 non-public offering, Alibaba owns 61.76 million shares, Tencent 51.55 million shares and Pingan 27.39 million shares, for a value of 1.5 billion yuan ($2.5 billion), 1.28 billion yuan ($2.1 billion), and 680 million yuan ($111 million), respectively.
Following the share subscription, the investment firms of Internet giants Alibaba and Tencent will each have an 8.08-percent stake in Huayi, up from 4.03 percent and 4.86 percent, respectively. Pingan will hold 2 percent of the company's shares.
Huayi disclosed in the filings that it plans to spend 3.1 billion yuan in film and TV drama productions as well as 500 million yuan to pay loans.
Huayi said that Alibaba and Tencent can also become investors in its movies by providing 5 percent to 10 percent of the total budget of each movie. In fact, it said that it is already planning to co-produce five films over the next three years with both Alibaba and Tencent. Huayi also added that Tencent could develop new online games based on its movies.
Wang Zhongjun, chairman of Huayi Brothers, said that they are thinking of ways to expand beyond traditional industry lines as they want to transform into an Internet entertainment company focusing on creating and expanding brand value.
Currently, the company operates as a film production outfit, a record label and a talent agency. In three to five years, Wang said, they may even venture into live theme parks, according to Want China Times.
