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SCMP Reporter

Tom Group is buying about 30 per cent of Huayi Brothers Media Group, the mainland's biggest private film-maker as it expands into a lucrative market recently opened to foreign investment.

The   company was expected to pay hundreds of millions of yuan for the stake, industry sources said.

Beijing-based Huayi made this year's award-winning comedy Cell Phone and Christmas blockbuster A World Without Thieves.

'It is a strong and logical investment [for Tom],' said an analyst at Media Partners Asia.

Industry players said it would be a win-win deal for both companies as Huayi was planning an overseas listing within three years.

Huayi is also in talks with other equity funds to dilute the interest of the company's founding brothers Wang Zhongjun and Wang Zhonglei even further.

The company has become one of the most profitable film-makers in the mainland by making use of sponsors and advertisers during production.

Its latest film A World Without Thieves - which premieres in Hong Kong today - has been sponsored by China Mobile, BMW and  Nokia.

Wang Zhongjun, who also produced another of the year's big hits, Warriors of Heaven and Earth, will join Tom chief executive Sing Wang at a press conference today.

Tom declined to comment yesterday but said it would today announce a strategic investment in a mainland film and television production company.

'The investment is a major initiative by the company to leverage its existing television platform China Entertainment Television and expand further into content production,' it said in a statement.

Tom has been expanding from an internet company into a cross-media platform. It bought a 64 per cent stake in loss-making CETV from Time Warner for $53.23 million last year.

'CETV is a channel that needs more programming,' said a Hong Kong-based analyst.

'You need content to facilitate growth of CETV and Tom Group as a whole.'

Since November 28, the State Administration of Radio, Film and Television has allowed foreign investors to take a maximum stake of 49 per cent in Sino-foreign television production ventures.

This has given the green light for global entertainment firms to enter a market with advertising sales expected to reach US$24 billion this year, a 45 per cent jump from last year.

Sony Pictures Television International said last month that it would set up a television production joint venture with Hua Long Film Digital Production of China Film Group.

'The opening of media sector is a stepping stone to grow the entire pay-television market,' one analyst said.



Tom takes role in mainland film industry