'Film town' will be China's movie mogul's ambitious expansion plans for Huayi Brothers

Movie mogul combines entertainment, tourism to build theme park on Hainan and aims to set up 20 other such attractions across mainland

PUBLISHED : Monday, 24 August, 2015, 5:21am
UPDATED : Monday, 31 August, 2015, 2:47pm

Early this month, a low-budget psychological thriller, The Gift, premiered in American cinemas and unexpectedly became a box office hit in its first week, ranking only after Hollywood blockbusters Mission: Impossible - Rogue Nation and Fantastic Four.

The Gift's success in the American movie market has encouraged Chinese entertainment tycoon Wang Zhongjun.

Wang, chairman of the mainland's largest private film and television production company Huayi Brothers, has been aggressively expanding his business empire overseas.

The Gift is his first movie investment in partnership with American company STX Entertainment. The two firms have agreed to jointly invest in at least 18 Hollywood films by the end of 2017.

"The China market is growing so fast, there's no doubt a world-class entertainment company will emerge from China," Wang, 54, said. "We hope Huayi Brothers can [achieve that] within three to five years."

The Beijing-based company is also in talks with at least two South Korean entertainment firms, which Wang may acquire.

The movie mogul knows how to leverage the power of capital to fund his ambitious plans.

Last Tuesday, Huayi Brothers and mainland lender Ping An Bank signed a 30 billion yuan (HK$36 billion) agreement for the bank to provide funds to back Huayi's overseas expansion plan and domestic tourism project.

The hot money inflow is a reflection of the rosy prospects of the mainland film industry - the world's second-largest film market after the United States.

In the first half of the year, the mainland box office raked in US$3.26 billion, a nearly 50 per cent increase year-on-year. The US box office took US$5.55 billion in the same period.

China is expected to become the world's No1 film market within the next few years.

"Twenty years ago, DreamWorks Studios and Huayi Brothers were founded.

"DreamWorks is a great company. But in terms of market value, Huayi is five times that of DreamWorks at its peak," Wang said.

"Look at Warner Brothers. It has more than 100 years of history and is valued at US$40 billion. I believe we don't need to wait that long to see [Huayi's] market value reach tens of billions of dollars."

Last year, Huayi Brothers' revenue grew nearly 20 per cent to 2.4 billion yuan; net profit was 890 million yuan.

Wang - the second of four children from a military family in Beijing - joined the army at age 16. After six years in the military and a three-year stint as a civil servant, he quit his job to become a freelance photographer and art designer. In the late 1980s, he enrolled at the State University of New York to study mass media.

He returned to China in 1994 and set up Huayi Brothers, then an advertising firm, with his younger brother Wang Zhonglei. Four years later, he invested in a teleplay upon a former colleague's advice; the move earned him more than 4 million yuan.

Buoyed by that success, Wang shifted his business focus to film and television production, launching around 70 films and nearly 30 dramas. Some were box office hits, including director Feng Xiaogang's 2008 romantic comedy If You Are The One and the 2013 fantasy film Journey to the West: Conquering the Demons, directed by Hong Kong film star Stephen Chow.

In 2009, Huayi - by this time a business empire covering film, television and music production, market promotion and cinema distribution - was listed on ChiNext, the Nasdaq-style board in the Shenzhen Stock Exchange.

Wang has also made a foray into the online market. He has injected over a billion yuan in mobile internet game developers Ourpalm - listed in the Shenzhen exchange in 2012 - and Guangzhou's Yinhan Technology. In May, digital marketing firm Guru Online, in which Huayi invested, went public in Hong Kong.

And he is now eyeing an even bigger market: tourism.

"We are learning from Disneyland," Wang said. "We won't be the major investor or developer in any of these projects, but will mainly be involved in trademark licensing and management."

His first tourism project, Feng Xiaogang Film Town, started operating in Haikou , Hainan province, this year. The park, covering nearly a million square metres, features replicas of scenes in popular mainland films directed by Feng.

So far, Huayi Brothers has signed deals with 13 cities and aims to build 20 such projects across the mainland. For each project, the company will receive 100 million yuan from the park developer for the right to use its trademark. It will also get a 10 per cent cut of profits.

"I have no idea if our tourism projects will turn out to be as profitable as we expect," Wang said. "But … you will lose the best timing if you insist on having a clear idea of everything [before embarking on it]."

Business success has brought Wang fame and wealth. He was this year ranked 198th on Forbes magazine's China rich list with a personal wealth of US$10.5 billion. In his spare time, Wang loves painting. He has hosted two personal painting exhibitions, and the next one will be held in Hong Kong in October.

"Maybe one day I will have my own museum to display my collections," Wang said. "Will it become part of Huayi's business some day? Very likely."