A recent equity freeze has been imposed on Huayi Brothers Media Corporation, involving shares worth 100 million yuan in its subsidiary Huayi Brothers Film (Haikou) Co., Ltd. The freeze was ordered by the Dongyang People's Court in Zhejiang Province.
Huayi Brothers Film (Haikou) Co., Ltd. was established in January 2021 with a registered capital of 100 million yuan. Its legal representative is Wang Zhonglei, and its business scope includes television program production, television drama production, and film distribution. The company is wholly owned by Huayi Brothers Media Corporation.
On April 3, Huayi Brothers Media issued a guarantee announcement, naming Huayi Brothers Film Company as the guaranteed party. According to the announcement, in the first nine months of last year, the film company reported revenue of 17.0854 million yuan but incurred a net loss attributable to shareholders of 28.3195 million yuan. Its total liabilities exceeded 700 million yuan, while its net assets stood at negative 245 million yuan.
As a former leader in China's film and television industry, Huayi Brothers Media has faced repeated challenges in recent years, including equity freezes, debt defaults, and financial losses. The freezing of its Haikou subsidiary's equity is not an isolated incident but reflects the company's ongoing operational and legal pressures.
Financially, Huayi Brothers Media expects a net loss of approximately 289 million to 407 million yuan for 2025, with an adjusted net loss of 314 million to 417 million yuan.
As of April 1, 2026, the company's overdue debts to banks and other financial institutions totaled 56.399 million yuan, exceeding 10% of its audited net assets for 2024. Additionally, 34 of its bank accounts have been frozen.
Huayi Brothers Media has been in a loss-making position for several consecutive years. From 2018 to 2024, the company accumulated losses exceeding 8.2 billion yuan. Preliminary estimates indicate that its net assets at the end of 2025 are projected to be between negative 94 million yuan and 63 million yuan.
This figure places the company at a critical juncture. If its audited net assets at the end of 2025 are confirmed to be negative, Huayi Brothers Media stock will be subject to delisting risk warnings following the disclosure of its 2025 annual report, in accordance with Shenzhen Stock Exchange regulations.
In a related development, shares held by Wang Zhonglei are being auctioned off by judicial order. An April 3 announcement stated that 11.3 million shares owned by Wang, the company's controlling shareholder, are set for judicial auction. These shares represent 17.10% of his holdings and 0.41% of the company's total shares. If the auction proceeds, the combined stake of the company's actual controller and acting-in-concert parties will be 7.86%, still making them the largest shareholder.
Huayi Brothers Media's stock price has continued to decline this year. Compared to its historical peak of 32.13 yuan in 2015, the current share price has fallen by more than 90%.
On April 15, Huayi Brothers Media's shares fell further, dropping 3.43% to 1.69 yuan per share by 10:20 a.m., with a market capitalization of 4.69 billion yuan.
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