Leading Industry Player's Legal Representative Faces Consumption Restrictions, All Shares Frozen

Huayi Brothers Media Corporation (300027.SZ) and its legal representative Wang Zhongjun have been issued a new consumption restriction order related to an advertising contract dispute. The applicant is Beijing Tairuifeike Technology Co., Ltd., and the enforcement court is the Beijing Chaoyang District People's Court. The company's total market capitalization stands at 6.187 billion yuan.

Founded in November 2004 by brothers Wang Zhongjun and Wang Zhonglei, Huayi Brothers went public in October 2009 and was once hailed as "China's first film and entertainment stock." Wang Zhongjun serves as chairman, while Wang Zhonglei is the general manager and vice chairman.

On the evening of December 10, Huayi Brothers announced that due to delayed repayment of certain funds, the company faced temporary liquidity shortages, leading to defaults on some debts. As of December 10, 2025, the company's overdue debts to financial institutions totaled 52.5 million yuan, exceeding 10% of its audited net assets in 2024. All shares held by the controlling shareholder have been frozen.

The same day, the company disclosed progress on a judicial auction of controlling shares. Wang Zhongjun's 154 million shares (48.54% of his holdings, 5.55% of total shares) will undergo a second auction on December 29–30 after the initial auction on December 8–9 failed. In October, 2.2594 million shares held by Wang Zhongjun and 157,000 shares by Wang Zhonglei were transferred via JD.com's judicial auction.

Currently, 100% of the shares held by the Wang brothers are frozen, accounting for 13.81% of the company's total equity.

Once a leading player in the media industry, Huayi Brothers has struggled with a prolonged debt crisis. Despite releasing films such as *Facing the Sun*, *Lychees of Chang'an*, and *The Volunteers: Bloody Peace* this year, the company remains unprofitable.

In the first three quarters of 2025, Huayi Brothers reported operating revenue of 215 million yuan, down 46% year-on-year, and a net loss attributable to shareholders of 114 million yuan, widening 168% year-on-year. From 2018 to 2024, the company accumulated net losses exceeding 8.2 billion yuan.

On the stock market, Huayi Brothers' shares have continued to decline, closing at 2.23 yuan on December 12, with a total market cap of 6.187 billion yuan—less than one-tenth of its peak value.