China's big private-sector film companies have started reporting earnings for 2014, with two of them on Friday exceeding growth expectations as the world's second-largest film market outperforms a weaker broader economy.
China's economy is the world's second biggest, but expansion in gross domestic product (GDP) eased to 7.4 percent in 2014, the lowest growth rate since 1990, and the government in Beijing expects growth of about 7 percent for 2015.
The entertainment business is showing solid growth though because of the still robust theater industry. Rao Shuguang, secretary general of the China Film Association, said this month that box office was booming because of the increased number of screens, now over 24,900.
Shenzhen Stock Exchange-listed Huayi Brothers said its earnings in 2014 hit $143 million, up 52 percent and ahead of the company's forecast for a 40 percent gain. According to Huayi Brothers, revenue in 2014 reached $380 million, up 19 percent, while operating profit rose 61 percent to $188 million.
In November, Huayi Bros., which saw its income from film decline 75 percent in the first nine months of 2014, said it planned to raise $588 million in a private placement, and technology giants Alibaba and Tencent bought a stake. It also signed a strategic agreement with Alibaba on e-commerce, online entertainment and movie development.
Also at the end of the week, Enlight Media said that its revenue rose 35 percent to $190 milllion in 2014, with its profit up 4.8 percent to $68 million. Operating profit grew 5.6 percent to $65 million.
Other big private firms in the industry include LeTV, which said in recent weeks that it expects its profit to rise by up to 30 percent to $53 million in 2014.
(Origin title: "China's Huayi Brothers, Enlight Report Better-Than-Expected Earnings")