China's Bona Film CEO Buys Stock Amid Recent Price Drop

6:43 AM PST 07/05/2013 by Patrick Brzeski
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Bona Film Group CEO, Yu Dong.

"Investors don't understand the China market," says the head of the company, in which Rupert Murdoch's 21st Century Fox owns a 19.9 percent stake.

Yu Dong, founder and CEO of Bona Film Group, has been scooping up company stock, after a price fall in the first half of 2013. Bona, the only Chinese studio on the Nasdaq Stock Market, has slid 15 percent so far this year.

But Yu says he isn’t worried. “Investors don’t understand the China market,” the media exec told Bloomberg in a recent interview. “I’ve been actively buying back stock in the past six months, to show my confidence.”

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Last year, Yu sold 19.9 percent of his personal stake in Bona to Rupert Murdoch’s News Corp., before the media mogul divided his empire into two. The sale left Yu with 27 percent of the company; his holdings have since grown to 30 percent, according to a company report shared at an investor conference in June.

Bona’s recent stock slide has corresponded with an overall fall in mainland Chinese stock indexes. The Shanghai Stock Exchange Composite Index and the CSI 300 Index of stocks on the Shanghai and Shenzhen exchanges are down over 10 percent this year, according to Bloomberg.

Bona reported a 78 percent year-on-year drop in net income for the first quarter, with the company taking $500,000 compared to $2.3 million in the same period in 2012. At the time, Bona attributed the less-than-stellar results to its ongoing investment in exhibition infrastructure, and the disappointing box office performance of Chow Yun-Fat’s The Last Tycoon.

In addition to film production, Bona runs a distribution arm, talent agency and an expanding cinema chain -- on track to grow from 20 cinemas now to 40 in 2014.

STORY: Bona Reports 78 Percent Year-on-Year Drop in Net Income for Q1

Yu is also betting that his partnership with Fox will help the company tap into the booming recent demand for homegrown Chinese language films in the country (63 percent of ticket sales in China this year have gone to local productions this year, as of July 3, according to state-backed media outlet, China Daily).

Bona currently has four Chinese-language projects in development with Fox International Productions, the first of which will be Moscow Mission, a heist film about a series of robberies on a train line linking Beijing to Moscow (the project is being written by a U.S. screenwriter, whose name has not yet been disclosed). The company also has a fifth, as yet untitled, co-production in the pipeline with Universal Pictures.  

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