Huayi Brothers Media Corporation announced on the evening of April 23 that it received a ruling from the Jinhua Intermediate People's Court in Zhejiang Province, initiating a pre-restructuring process for the company. The court appointed Zhong Lun Law Firm (Shanghai) and Zhejiang Zhiren Law Firm as temporary administrators for the pre-restructuring.
On April 15, Huayi Brothers disclosed that Beijing Tairuifeike Technology Co., Ltd. had applied to the Jinhua Intermediate Court for pre-restructuring, citing the company's inability to repay matured debts despite having restructuring potential. The creditor's application was based on Huayi Brothers' failure to pay a principal debt of 11.405155 million yuan stemming from a previous advertising contract dispute.
The company stated that entering pre-restructuring would facilitate early preparations for debt settlement and operational adjustments. A successful pre-restructuring and subsequent formal restructuring could help improve operational and financial conditions, supporting sustainable development. However, the court's initiation of pre-restructuring does not guarantee formal acceptance of the restructuring application, leaving significant uncertainty about whether the company will proceed to full restructuring.
Founded in November 2004 with a registered capital of approximately 2.77 billion yuan, Huayi Brothers went public in 2009 and was once hailed as "China's premier film and entertainment stock." Its shares peaked at 32 yuan per share in 2015, with market capitalization exceeding 90 billion yuan, before declining steadily in subsequent years.
The company's financial situation has deteriorated significantly in recent years, with accumulated losses surpassing 8.2 billion yuan over seven consecutive years from 2018 to 2024. Brothers Wang Zhongjun and Wang Zhonglei, key figures in the company, have faced multiple restrictions on high-consumption activities. On March 18, the Beijing Chaoyang District People's Court issued another consumption restriction order against Huayi Brothers and its legal representative Wang Zhongjun, following earlier enforcement actions totaling over 1.89 million yuan in the same case.
Additionally, Wang Zhonglei's holdings are subject to judicial auction. An April 3 announcement revealed that 11.3 million shares held by the controlling shareholder, representing 17.10% of his total holdings and 0.41% of the company's total shares, would be auctioned off.
According to a January 30 performance forecast, Huayi Brothers estimated its net assets by the end of 2025 would range between -94 million yuan and +63 million yuan (unaudited). If audited year-end net assets prove negative, the company's shares would face delisting risk warnings under Shenzhen Stock Exchange rules.
Huayi Brothers' shares closed at 1.97 yuan on April 23, up 6.49%, with a current market capitalization of 5.466 billion yuan—more than 90% below its peak valuation.
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