Wang Zhongjun, the chairman of Shenzhen-listed film maker Huayi Brothers Media, has joined the ranks of China’s movie industry billionaires.
Huayi’s shares have climbed by more than 160% in the past year amid rising prospects for home-grown entertainment industry content in China. They gained 5.5% today at close at an all-time high of 42.2 yuan.
Founded in Beijing in1994, Huayi produces films, television programs, music and other content. Wang, who also goes by the English name Dennis, owns a 26% stake in Huayi that is worth more than $1 billion; his brother, Wang Zhonglei, whose English name is James, holds 8% of the company. Jack Ma, the chairman of Alibaba Group and one of China’s richest Internet entrepreneurs, owns 5% of Huayi.
Huayi’s stock has soared after the company last month projected net profit in the first half of 2013 would as much as triple from $17 million a year earlier on good box-office income. Investors have also bid up its shares after the company said on July 24 it would acquire 50.9% of mobile game developer Yinhan Technology for the equivalent of $109.5 million.
First-half profit also gained on the disposal of a 0.8% stake in mobile game operator Ourpalm, and other revenues. Huayi still holds more than 11% of Ourpalm.
Entertainment industry growth has fueled a surge in valuations of leading companies this year; Huayi’s price-earnings ratio is now in the ballpark of 50. Wang Changtian, chairman of filmmaker Beijing Enlight, made it into billionaire territory of late. Enlight has been trading in the same lofty earnings-multiple range as Huayi.
PwC in a report in June entertainment industry revenue in China would grow by 15% annually for the next five years. Hollywood giants including DreamWorks and Disney are also chasing that growth.