China's Huayi Brothers Sees Film Business Income Fall 75 Percent in First 9 Months
Huayi Brothers' net profit was up 10.4 percent in the first three quarters of 2014
Huayi Brothers Media Co., one of China's top privately held film companies, registered a 10.4 percent rise in net earnings to $74.35 million in the first nine months of this year, but saw revenues from its film unit fall 74.76 percent as it focused on expanding other sectors, particularly online gaming and building cinemas.
Huayi Brothers, which is run by Wang Zhongjun and Wang Zhonglei, saw revenues down 6.37 percent at $156.54 million (958 million yuan) compared to last year.
During the first three quarters of the year the group released six films, including successes such as Feng Xiaogang's Personal Tailor, but it did not have a major blockbuster such as Stephen Chow’s Journey to the West: Conquering the Demons, which earned $201 million in the box office last year.
The group's TV business grew 32.25 percent and its cinema income increased 35.72 percent, according to Securities Daily.
An analyst at Pacific Securities said the film business was expected to pick up next year, when the group is expected to release at least 18 movies with box-office forecasts of five billion yuan ($820 million).
Next year, Huayi is due to get involved in the political thriller John Wick, featuring Keanu Reeves, and is also investing in the Lionsgate action comedy Mortdecai, with Johnny Depp.
Huayi was also a "major investor" in the $75 million Fury, featuring Brad Pitt and Shia LaBeouf.
Last month, Huayi Brothers announced that it was setting up a $130 million subsidiary in the United States to invest in the distribution and production of movies and TV shows, and earlier this week, THR reported that Huayi had selected its first movie to be financed through its new U.S. company: a Chinese-language remake of the Robert Downey Jr.-Marisa Tomei romantic comedy Only You.
Also in September, Huayi Brothers said it raised its equity holdings in GDC Technology, one of the world’s top digital cinema tech suppliers, to give it a controlling 79 percent stake.
The group had previously linked up with Jeff Robinov’s Studio 8 project, but then pulled out, although it said it might become become involved in future distribution opportunities.
In June, Huayi Brothers announced plans to raise $403 million, from a share issue and said it would use the capital to invest in film and TV projects.