Huayi Brothers Media Corporation (stock code: 300027, short for ST Huayi) has finally found its white knight. The company announced on September 15, 2026, that China Media Capital Co., Ltd. (CMC) has been designated as the restructuring industry investor for its pre-restructuring case.
According to the restructuring investment agreement and supplementary agreement, CMC will acquire shares at a price of 0.9333 yuan per share. The market reference price for the shares was calculated based on the average trading price of 1.8666 yuan per share over the twenty trading days before the agreements were signed. The per-share consideration paid by the industry investor is no less than 50% of that market reference price.
Huayi Brothers will implement a capital reserve conversion to increase shares, with 2,497,055,327 new shares being issued—a ratio of 9 new shares for every 10 existing shares based on the current total share capital of 2,774,505,919 shares. After this conversion, the company's total share capital will rise to 5,271,561,246 shares. The newly issued shares will not be distributed to original shareholders. CMC will receive 896,165,412 shares, representing approximately 17% of the post-restructuring total share capital. Financial investors will receive 1,128,114,106 shares, accounting for roughly 21.4%. The remaining converted shares will be used, in part or in full, to settle bankruptcy restructuring debts.
In the restructuring process for Huayi Film, the company's debt repayment resources will be used to settle Huayi Film's obligations, which ensures that Huayi Brothers' equity interest in Huayi Film remains unchanged. As a result, the equity rights of Huayi Film's investors do not need adjustment, and upon completion of the restructuring, Huayi Brothers will continue to hold 100% of Huayi Film. Based on this arrangement, CMC's total investment cost amounts to 836 million yuan.
CMC is ultimately controlled by Li Ruigang. Through this restructuring investment, CMC intends to provide financial and other support to Huayi Brothers, aiming to restore and improve the company's ability to operate sustainably while maximizing the protection of creditors, shareholders, employees, and other stakeholders. Upon completion of the restructuring, Huayi Brothers will continue to exist as a listed company, and CMC will become the controlling shareholder and take control of the company within the timeline specified in the agreement.
Heavy Burdens: Abandoned by Alibaba and Tencent
A deep-seated crisis has taken hold. As of June 30, 2026, Wang Zhongjun held 5.88% of shares, Sun Kai held 3.03%, and Wang Zhonglei held 1.98%. Alibaba founder Jack Ma held 1.6%, Alibaba Venture Capital held 1.59%, with other smaller shareholders comprising the remainder. Wang Zhongjun and Wang Zhonglei, acting in concert, serve as the controlling shareholders and actual controllers of the company. By comparison, as of December 31, 2025, Wang Zhongjun's stake was 11.43%, Jack Ma's was 2.6%, and Tencent's Shenzhen Tencent Computer System Co., Ltd. held 1.01%.
The contrast over the past six months paints a stark picture: Wang Zhongjun's shareholding dropped by 5.88 percentage points, Wang Zhonglei's by 0.4 percentage points, Jack Ma's by 1 percentage point, and Alibaba Venture Capital's by 0.81 percentage points. Both Tencent and Hong Kong Securities Clearing Company have exited the top ten shareholders list entirely. The core reason for Wang Zhongjun's declining stake is the company's persistent financial distress over recent years, with his shares being repeatedly auctioned off to satisfy debts.
In July 2026, Huayi Brothers announced that 40 million shares held by Wang Zhongjun were publicly auctioned by the Chaoyang District Court, reducing his stake from 4.87% to 3.43%, and the combined stake of Wang Zhongjun and his concert party Wang Zhonglei from 6.85% to 5.41%. In May 2026, the company was added to the list of judgment debtors by the Beijing Chaoyang District People's Court due to a contract dispute with Jingkaili Consulting (Beijing) Co., Ltd., and restrictions were imposed on both the company and its legal representative Wang Zhongjun.
Despite having a market value of around 5 billion yuan, Huayi Brothers has been effectively abandoned by Tencent and Alibaba. Even Jack Ma, who held shares for many years, continues to reduce his position. Mainstream funds have all distanced themselves from the company, leaving only retail investors to hold the line. The reason capital has fled is that Huayi Brothers' problems run deep—its financial reports reveal a first-half 2026 revenue of 85.45 million yuan, down 44% from 153 million yuan in the same period last year. Investment income fell 35.6% year-on-year to 29.78 million yuan due to reduced gains from disposing of financial assets measured at fair value through profit or loss.
The company posted a net loss of 36.39 million yuan for the first half of 2026, compared to a 74.44 million yuan loss a year earlier. After deducting non-recurring items, the net loss was 40.23 million yuan, against a 112 million yuan loss in the prior-year period. Operating cash flow stood at negative 18.69 million yuan. If the restructuring succeeds, it could improve the company's operations and financial position. But if it fails, the company faces the risk of bankruptcy declaration, which would lead to the delisting of its shares.
From Glory to Decline: A Multi-Faceted Downfall
Huayi Brothers' decline has been years in the making. The company's fall from industry leader to fringe player is the inevitable result of long-term failures across strategy, capital allocation, content development, and the shifting industry landscape. Several key factors stand out.
First, a misguided strategy of "de-emphasizing film" emerged during the company's peak. Before establishing enough top-tier intellectual property, the company poured over 3.5 billion yuan into heavy-asset projects like studio tourism and cultural tourism towns. Projects such as the Changsha Film Town required massive investment, had long payback periods, and were difficult to operate—they all suffered losses and ultimately had to be sold at low prices, turning into heavy burdens that continuously drained cash flow.
Second, the company became addicted to capital games that eventually backfired. After going public, the Wang brothers pursued high-premium acquisitions of shell companies owned by celebrities. They spent 1.8 billion yuan to buy two shell companies, creating enormous goodwill—with all the risk borne by the listed company and minority shareholders, while celebrities and the actual controllers locked in their returns in advance. In October 2015, Huayi Brothers acquired 70% of Zhejiang Dongyang Haohan Film Entertainment Co., Ltd. for 756 million yuan—a company that had only been established one day earlier, with stars including Li Chen, Feng Shaofeng, Angelababy, Zheng Kai, Du Chun, and Chen He as shareholders. In November 2015, it acquired 70% of Zhejiang Dongyang Meila Media Co., Ltd., a company founded just over two months earlier, with Feng Xiaogang as a major shareholder. By 2015, the Wang brothers' share pledge ratios had exceeded 90%, as they cashed out heavily through pledges, which—after the stock price collapsed—intensified margin call risks and deepened the financial crisis.
Third, on the content front, the company suffered from severe path dependency and a broken creative pipeline. The content system was built entirely around Feng Xiaogang, with resources over-concentrated on this single figure and virtually no support or cultivation of emerging directors. When Feng's creative output waned, competitors like Enlight Media benefited from hits like Nezha, while Huayi Brothers failed to secure new top-tier directors or establish a presence in animation and new mainstream categories. The company never produced a blockbuster capable of sustaining its performance.
Fourth, black swan events and industry transformation dealt heavy blows. The exposure of Fan Bingbing's "yin-yang contract" scandal caused severe damage, forcing the shelving of Cell Phone 2. Subsequent COVID-19 impacts and a broader adjustment in the film industry pushed Huayi Brothers into a vicious cycle: the more it lost, the less it dared to invest; the less it invested, the fewer hits it produced—ultimately sliding from industry leadership to the margins.
During his most glorious days, Wang Zhongjun returned to his childhood passion, devoting much of his energy to art appreciation and collecting. In 2014, he spent a record 377 million yuan at a Sotheby's Impressionist and Modern Art evening sale to acquire Van Gogh's "Vase with Daisies and Poppies." He later secured Picasso's "Seated Woman with Hair Net" for 185 million yuan. But his extracurricular pursuits also invited ridicule. In 2018, Wang sold what he claimed was a master-level abstract sculpture to actress Yuan Li for 150,000 yuan. After examining the piece, Yuan contacted the artist, who denied ever creating the work. Yuan later publicly complained about buying a fake, saying she couldn't bear to throw away her 150,000-yuan purchase and instead used it to hang clothes and hats.
Once surrounded by stars like Huang Xiaoming, Fan Bingbing, and Li Bingbing, the world around Wang Zhongjun and Wang Zhonglei has long since faded. As the brothers declined, public criticism intensified. One notable controversy involved a profit-sharing dispute with Stephen Chow over "Journey to the West: Conquering the Demons." Huayi Brothers had paid 88 million yuan for exclusive mainland distribution rights and allegedly reached an oral agreement to pay additional tiered dividends if box office exceeded 500 million yuan. The film ultimately grossed 1.248 billion yuan, but Huayi Brothers refused to pay, citing the lack of a signed supplementary agreement. Chow sued and lost. Wang Zhonglei's remark that "the court understands films better than Mr. Chow's company" fanned the flames publicly. In 2016, Chow's "The Mermaid" went to Enlight Media and grossed 3.392 billion yuan, while Huayi Brothers lost the opportunity to work with Chow due to its shortsightedness. The 86.1 million yuan dispute became one of the symbolic events marking Huayi Brothers' downward trajectory.
Now, with the AI wave sweeping through and short-drama formats booming, the film industry faces further disruption. Huayi Brothers has long lost its luster. And the beleaguered Wang brothers find themselves buried in troubles—a striking contrast to Wang Zhongjun's lavish purchase of Van Gogh's masterpiece in his prime.
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