A bankruptcy petition has pushed Huayi Brothers Media Corporation, once hailed as the "first stock of China's film and entertainment industry," to a critical turning point. On the evening of April 23, Huayi Brothers Media Corporation announced that the Jinhua Intermediate People's Court in Zhejiang Province has decided to initiate preliminary restructuring procedures for the company. The court has appointed Zhong Lun Law Firm (Shanghai) and Zhejiang Zhiren Law Firm as temporary administrators for the preliminary restructuring. Prior to this, creditor Beijing Triforce Technology Co., Ltd. filed an application with the Jinhua court, seeking restructuring and preliminary restructuring for the company on the grounds that it "is unable to repay due debts and clearly lacks repayment capacity, but possesses restructuring value."
Just days earlier, Wanda Film officially changed its name to Ruyi Film, marking a stark divergence in the paths of two major private film giants this April. Huayi Brothers, once a flagship representing the glory of China's private film industry, is now navigating its most crucial waters.
Founded in 1994 by brothers Wang Zhongjun and Wang Zhonglei, Huayi Brothers initially started in the advertising business. In 1998, the company invested in director Feng Xiaogang's film "Sorry Baby," a decision that marked its official entry into the film and television industry. Subsequently, Feng Xiaogang's works such as "Big Shot's Funeral," "A World Without Thieves," and "If You Are the One" became annual box office hits, establishing the "Huayi Brothers + Feng Xiaogang" combination as a golden brand in Chinese commercial cinema.
In 2009, Huayi Brothers went public on the Shenzhen Stock Exchange's ChiNext board, becoming the first privately-owned film and television company to list in China. Following the listing, well-known actors including Huang Xiaoming, Li Bingbing, and Deng Chao joined the company, expanding its business into film, television production, and artist management. With the support of capital markets, the company's market capitalization once peaked at the top of the industry.
However, the glory did not last. As industry competition intensified, star contracts expired, and key creative talents moved on, Huayi Brothers entered a prolonged period of adjustment. In recent years, the company has reported annual losses multiple times, with operational pressures continuing to accumulate. Controlling shareholders Wang Zhongjun and Wang Zhonglei have repeatedly faced restrictions on high-consumption activities, and their shares have been successively frozen or entered judicial auction procedures.
Huayi Brothers clarified in its announcement that the initiation of preliminary restructuring does not mean the court has formally accepted the restructuring application. Significant uncertainty remains regarding whether the company will proceed to formal restructuring. If the court rules to formally accept the restructuring application, the company's stock will be subject to delisting risk warnings. If the restructuring plan fails to proceed smoothly, the company could face bankruptcy declaration, and its stock may be terminated from listing.
However, the start of preliminary restructuring is not entirely negative. Industry analysts suggest that court approval for preliminary restructuring indicates judicial recognition of the company's restructuring value and feasibility, paving the way for introducing strategic investors and formulating restructuring plans. Huayi Brothers expressed a positive stance in its announcement, stating that entering preliminary restructuring facilitates early initiation of debt clearance and operational arrangements, enabling communication with creditors and potential investors to develop feasible plans based on the company's actual situation. Successful preliminary restructuring and subsequent implementation could help improve operational and financial conditions, optimize the asset-liability structure, and achieve sustainable, healthy development.
Huayi Brothers' 2025 annual report is scheduled for disclosure on April 29. If audited year-end financial indicators trigger delisting risk warning conditions, the company's stock will face stricter trading status.
From its status as the "first stock of China's film and entertainment industry" to its current preliminary restructuring phase, Huayi Brothers' journey reflects both the decades-long story of private capital's involvement in China's film industry and an ongoing test of industrial structural changes and corporate governance. In the coming months, whether temporary administrators can successfully attract restructuring investors with industrial integration capabilities and whether creditors can reach consensus on restructuring plans will directly determine the fate of this veteran film company.
Comments