Recently, the news of Huayi Brothers Media Group applying for restructuring has sparked industry attention. Huayi Brothers, known as the “number one stock in China’s film and television industry”, has been making significant moves in the capital market since its establishment. However, due to setbacks in the film business and ineffective expansion strategies, the company eventually faced a fund chain rupture.
Founded by brothers Wang Zhongjun and Wang Zhonglei in 1994, Huayi Brothers Media Corporation celebrated its 20th anniversary in 2014 with a grand ceremony attended by nearly a hundred celebrities including Feng Xiaogang, Tsui Hark, Ge You, Andy Lau, Zhang Guoli, Huang Xiaoming, Li Bingbing, Yao Chen, Song Dandan, Na Ying, and Sun Nan. It was considered the “golden era” of Huayi Brothers.
However, 12 years later, the company is facing a different reality. On April 15th this year, Huayi Brothers announced that Beijing Tairui Feike Technology Co., Ltd., a creditor of the company, applied for the company’s restructuring to the court citing inability to repay maturing debts and lack of clear solvency, but posited that there is restructuring value, and simultaneously applied to initiate pre-restructuring procedures.
According to the announcement, as of April 1, 2026, Huayi Brothers had 34 frozen bank accounts and approximately RMB 56.4 million in overdue debts at financial institutions. Additionally, the company’s net assets were expected to range between negative RMB 94 million to 63 million as of the end of 2025, constantly facing the financial red line of insolvency.
On April 20th, China News Network reported that in the late 1990s and early 21st century, Wang Zhongjun and Wang Zhonglei invested in a series of Feng Xiaogang-directed Lunar New Year films, which brought them both fame and deepened their ties.
Wang Zhonglei once said, “Half of Huayi Brothers’ success is due to Feng Xiaogang.” After Feng Xiaogang’s first contract expired, he left Huayi Brothers for a year, which he described as a setback because of his reliance on Feng Xiaogang.
Feng Xiaogang later returned to Huayi Brothers. Their second contract was worth 40 million RMB in cash and 3% of the company’s shares. In 2009, Huayi Brothers went public, becoming the first A-share market company engaged in film production. Feng Xiaogang cashed out over 200 million RMB from some of his shares.
In November 2012, the release date of Feng Xiaogang’s film “Back to 1942” was confirmed. However, the box office performance of the film was far below expectations. Within two trading days after its official release, Huayi Brothers’ market value evaporated by 1.3 billion RMB.
In December 2015, Huayi Brothers acquired a 70% stake in Zhejiang Dongyang Mayer Media Co., Ltd. for 1.05 billion RMB. At that time, the total assets of Mayer Media was only 136,000 RMB, total liabilities were 191,000 RMB, and net assets were negative 55 million RMB.
The agreement stipulated the annual after-tax net profit from 2016 to 2020; if the targets were not met, Feng Xiaogang would have to make up the difference from his own pocket. This was one of the most famous high-stakes bets in the Chinese film industry, involving hundreds of millions of RMB.
In 2014, Huayi Brothers raised nearly 3.6 billion RMB in financing and received investments from Alibaba and increased holdings from Tencent. In 2015, Huayi Brothers achieved a net profit of 1.218 billion RMB, marking the highest net profit in its history.
However, post the excitement, in 2018, Huayi Brothers incurred its first loss after going public.
In 2018, films such as “Detective Dee: The Four Heavenly Kings” in which Huayi Brothers participated did not perform as expected at the box office. Moreover, the business expansions made in other fields prior were unable to generate additional revenue in the short term.
To address the company’s cash flow issues, Wang Zhongjun began selling his art collection to raise funds. In 2019, Huayi Brothers suffered a huge loss in operations, approximately negative 4 billion RMB.
In recent years, most of the news about Huayi Brothers has been negative.
From the operational and credit perspectives, Huayi Brothers has lost its last financing credit enhancement. By the end of 2025, most of the shares held by Huayi Brothers’ controlling shareholders Wang Zhongjun and Wang Zhonglei had been frozen or auctioned off, reducing their combined ownership to around 8.26%.
The Shenzhen Stock Exchange sent an annual report inquiry letter to Huayi Brothers, demanding an explanation regarding the risk of debt default. The controlling shareholders of Huayi Brothers received a warning letter from the Zhejiang Securities Regulatory Bureau for the second time, Tencent reduced its holdings in Huayi Brothers, and both the company and its legal representative were subject to high consumption restrictions due to a dispute over an advertising contract.