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Huayi jumps after alliance formed
Print Edition
SHARES of Huayi Brothers Media Corp jumped by the daily limit of 10 percent yesterday after they resumed trading as the firm formed an alliance with Tencent and Alibaba to cooperate in the Internet and the entertainment sectors.
China’s biggest Internet company Tencent and e-commerce giant Alibaba will each hold 8.08 percent of Huayi Brothers’ shares after the private placement. They will also be the second-biggest shareholders in the company after senior Huayi Brothers executives. Tencent had bought 4.6 percent in Huayi Brothers in 2011.
Ping An Asset Management Co, a unit of Ping An Insurance Group, also bought 1.98 percent of Huayi Brothers.
Huayi Brothers, which raised 3.6 billion yuan (US$588 million) by selling 145 million new shares, plans to use the capital for new film production projects and repay debts, according to a filing to the Shenzhen Stock Exchange yesterday. Its shares closed at 25.85 yuan yesterday after they were suspended for over two months.
“Our alliance with Alibaba and Tencent will strengthen our development in areas such as mobile Internet,” the Beijing-based company said in a statement.
Alibaba’s film division will be co-producing and co-distributing five movies within the next three years.
Huayi Brothers will also strengthen collaboration with the e-commerce company in online ticket sales, developing derivative products as well as expanding distribution channels on smartphones and smart TV sets.
Huayi Brothers will also have priority rights to adapt and produce film and television plays based on online gaming and online literature works whose intellectual property rights are owned by Tencent.
Hongyuan Securities has put a “buy” rating on the stock.
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