Looking back on 2007, Wang Zhongjun said that he felt extremely happy. China has witnessed flourishing development during the past seven years, but not everyone was able to catch the tide. "Fortunately, Huayi Brothers seized their chance," said Wang, the group's president, contently.
In 1998, the year that Chinese entertainment market finally began normal operations, Wang made his first investment in the movie industry. After a decade of dedicated efforts, Huayi Brothers has managed to grow from a private business into the largest media company in China. Now the conglomerate is preparing for its debut in the public stock market. If it succeeds, the Chinese entertainment market will enter a new phase of development.
Huayi Brothers boasted steady progress in recent years. For Wang, however, there is still more potential to be tapped. With the largest talent pool, the company is undoubtedly at the top of the Chinese movie industry. In 2005, it began exploring new frontiers by investing heavily in various TV series. Two years later, Wang reaped a bumper harvest with Soldiers Sortie gaining rapturous applause. In addition, Huayi Brothers is now collecting talented singers, producers, directors and even scenarists, in addition to film and TV stars. "A bright future lies just in front of us," said Wang delightedly.
In 2005, Huayi Brothers led the rest Chinese entertainment companies in raising funds through private equity. Within two years, Jiang Nanchun and Ma Yun, both on the list of top 25 influential Chinese entrepreneurs, became shareholders of Huayi Brothers. They brought the media conglomerate not only money, but also brand recognition. "Their high profile is a constant promotion of our brand name," said Wang.
This year, Huayi Brothers underwent a drastic change, with its business being restructured into two major parts: video production and related products, and celebrity services and related products. While aiming at a much larger talent pool and production scale, this is also a necessary move for the future listing on the public stock market.
In the past three years, Huayi Brothers has witnessed steady profit growth rates ranging between 50 percent and 80 percent every year. Although project budgets remain the same, the investment scale has been largely enhanced. When Kung Fu Hustle was shot, Huayi Brothers only contributed 5 percent of the total investment. Last year, however, Wang Zhongjun became the sole investor of The Banquet and his company is the only copyright owner of such box office winners like the Rob-B-Hood and Battle of Wits. "This is a remarkable change," said Wang cheerfully. "We used to have great difficulty getting loans, but now we have opened more funding channels. This guarantees smooth business operations."
When recalling initial hard times, Wang admitted that he was lucky. But more importantly, he said, was that he had always worked hard to establish a brand, which eventually led to his success. "In recent years, despite the sluggish environment of the entertainment market, we made great efforts to build up our company reputation. When we borrowed money to produce films, we paid back the loans strictly in accordance with the contract, even if we suffered great financial losses in production. Truthfully, company fame has brought us amazing benefits. Today, our shareholders are delighted to invest with us. Banks are confident offering us loans. If a company enjoys a smooth capital turnover, there is nothing to block its way to a brighter future."
In Wang's opinion, currently, his company has no contenders in the Chinese market. "We are the first to raise funds in the stock market, the first to offer commission services, the first to enjoy sole ownership of a music company, the first to engage in mergers and acquisitions, and even the first to announce that we will be the Chinese 'Time Warner'." But the movie market will not be monopolized. "It will be more exciting when more competitors crop up," he added. For Wang, faithful teamwork has contributed greatly to the company's success. "Feng Xiaogang worked with us eight times. In China, it is really rare for a movie company to maintain close and regular cooperation with such a famed director. Many employees have worked for Huayi Brothers ever since the company was founded."
Because Huayi Brothers is a family business, Wang Zhongjun's future plan asserts that it is important to reduce family influence and control. "Ma Yun set a good example for me. His listing on the stock market has churned out some 20 billionaires and more than 4,000 millionaires. An entrepreneur should be as open-minded as him."
All Chinese movie companies cherish one common dream when they grow stronger: to extend their business into the fields of cinema operation. Wang Zhongjun is of course no exception. But he concedes that the cake in the film market is too big. Wang even has plans of providing services for sport stars. In his eyes, all people engaged in cultural activities can be regarded as artists and they have a strong demand for professional service. There is more than ample space for Huayi Brothers to expand.
Compared with other industries, however, Wang admitted the entertainment industry is still quite green in the capital market. He enjoys great fame only because his name is often associated with stars. It is obvious that his strength is still limited as compared with other entrepreneurs. "I'm working hard to prove myself in the entertainment industry, and I'm trying my best to prove that this industry also has a promising future," said Wang resolutely.
Assembly, the blockbusting movie Huayi Brothers released nationwide recently, fills Wang Zhongjun with confidence. "For us, 150 million yuan (approximately US$20 million) is the worst box office take. We're hoping for 200 million yuan."
(China.org.cn by Chen Xia, January 7, 2007)