Due to arrears of tens of millions of dollars in debt, Huayi Brothers, the former "big brother in film and television", was asked by creditors to apply for reorganization. On the evening of April 15, Huayi Brothers issued an announcement stating that the creditor Tai Ruifike applied to the court to reorganize the company on the grounds that the company could not pay off its due debts and clearly lacked solvency, but it had reorganization value, and also applied to initiate pre-reorganization procedures.
The announcement shows that as of the date of the issuance of the "Notification Letter" from Tyrefike, Huayi Brothers has a due debt principal of 11.4052 million yuan that has not been paid to Tyrefike.
Huayi Brothers stated that if the subsequent reorganization is successfully implemented, it will be conducive to improving the company's operating and financial conditions, enhancing operating capabilities, and optimizing the company's asset and liability structure. If the reorganization fails, the company will be at risk of being declared bankrupt.
Judging from performance, Huayi Brothers has been mired in losses since 2018. By 2024, the company's cumulative net profit loss attributable to the parent company in seven years will reach 8.246 billion yuan. In 2025, the company is expected to lose another 289 million yuan to 407 million yuan.
Huayi Brothers' asset-liability ratio has also soared from 13.25% at the end of the year of listing to 87.69% at the end of the third quarter of 2025.
After the news of the application for reorganization and pre-reorganization by creditors was released, Huayi Brothers' stock price reached its daily limit at "20CM" on April 16, closing at 2.09 yuan per share.However, compared with the historical high in 2015, Huayi Brothers' stock price has still fallen by more than 90%.
Huayi Brothers was in arrears and applied for reorganization
According to the announcement issued by Huayi Brothers on the evening of April 15, the applicant/creditor who applied to Jinhua Intermediate People’s Court to reorganize the company this time is Beijing Tai Ruifike Technology Co., Ltd. (hereinafter referred to as Tai Ruifike).
Tianyancha shows that Tai Ruifike was established in 2016 and is an enterprise mainly engaged in technology promotion and application services.
Radar Finance noticed that Huayi Brothers’ 2022 financial report showed that the company had defaulted on 11.6288 million yuan in accounts payable by Tai Ruifike for more than a year.
According to the announcement issued by Huayi Brothers in January last year, in October 2024, Tai Ruifike took Huayi Brothers to court. The cause of the case was an advertising contract dispute, and the amount involved was as high as 13.4803 million yuan.
According to an announcement issued by Huayi Brothers in February this year, the company and Tai Ruifike reached an agreement through negotiation, and both parties have signed a settlement agreement to extend the original overdue debt.
However, recently, Huayi Brothers received a "notification letter" from Tai Ruifike. As of the issuance date of the Notification Letter, Huayi Brothers had unpaid principal of RMB 11.4052 million in due debt to Tai Ruifike.
Tyrefike believes that Huayi Brothers cannot pay off its due debts and obviously lacks solvency, but it has restructuring value. In order to protect its legitimate rights and interests, Tairuifeike applied to the Jinhua Intermediate People's Court for a legal ruling to reorganize the company, and applied for pre-reorganization of Huayi Brothers.
The announcement shows that as of April 15, Huayi Brothers has not received the documents from Jinhua Intermediate Court to accept the pre-reorganization application. There are major uncertainties as to whether the applicant's pre-reorganization application can be accepted by the court and whether the company will subsequently enter the pre-reorganization or reorganization procedures.
Huayi Brothers emphasized that the reorganization procedure is different from the bankruptcy liquidation procedure. It is a judicial procedure aimed at saving the reorganized enterprise, retaining the legal person qualifications of the reorganized enterprise, and restoring the sustainable profitability of the reorganized enterprise. It is a judicial procedure to help the reorganized enterprise get rid of its financial and operating difficulties by readjusting its assets and liabilities, rearranging its operation and management, etc.
Huayi Brothers stated that regardless of whether the company enters pre-reorganization or reorganization procedures, the company will actively do a good job in daily production and operation management on the existing basis.
If the court rules that the company enters reorganization, Huayi Brothers will cooperate with the court and the administrator in carrying out the reorganization work in accordance with the law. On the premise of balancing the protection of the legitimate rights and interests of all parties, Huayi Brothers will actively discuss the debt resolution plan with all parties.
At the same time, Huayi Brothers will actively seek support from relevant parties to achieve smooth progress in the reorganization work, maximize the protection of the interests of the company and all shareholders, and promote the company to return to the track of healthy and sustainable development as soon as possible.
However, Huayi Brothers also admitted that even if the court formally accepts the reorganization application, there is still a risk of being declared bankrupt and subject to bankruptcy liquidation due to failure of reorganization.
If a company is declared bankrupt due to failed reorganization, the company's shares will face the risk of being delisted in accordance with relevant regulations.
The Wang brothers join forces to build a film and television empire
As a veteran film manufacturer that has invested in and produced many acclaimed and popular commercial blockbusters such as "A World Without Thieves", "Assembly", "Mermaid" and the "Detective Detective" series, Huayi Brothers once occupied a pivotal position in the domestic entertainment industry.
Public information shows that the founders of Huayi Brothers are brothers Wang Zhongjun and Wang Zhonglei (also known as Wang Zhongjun and Wang Zhonglei). They were born in a military family in Beijing, with four brothers. Among them, the second brother Wang Zhongjun was born in 1960, and the fourth brother Wang Zhonglei was born in 1970.
In 1976, Wang Zhongjun joined the army when he was under 17 years old. After retiring from the army, he started a small business and later worked in the State Administration of Materials.
In 1989, Wang Zhongjun gave up his "iron rice bowl" and went to the United States to study in the media major. According to what he later said, while studying in the United States, he worked and studied at the same time. "He changed schools three times. The purpose of each transfer was to find a place where it was easier to work."
In 1994, Wang Zhongjun, who returned from school, founded Huayi Brothers Advertising Company with 100,000 US dollars saved in the United States and funds raised from relatives and friends. Among them, the fourth brother Wang Zhonglei invested more than 100,000 yuan in savings for his brother.
However, it was not Wang Zhonglei who first ran the company side by side with Wang Zhongjun, but Wang Zhongfang, the third oldest person. Wang Zhonglei also tried to start his own business after resigning from the State Administration of Materials, but unfortunately failed, and then joined his brothers' company.
In 1995, Huayi Advertising found an important way to make money - expanding CI to the downstream. Since then, Huayi has transformed into an engineering production company, which also laid the foundation for the company's subsequent growth into a leading private film and television company.
In the 1990s, a series of documents aimed at deepening the reform of the film industry mechanism were released, providing institutional guarantees for social capital to participate in film production. With the further liberalization of the qualifications for film production market entities, a large amount of talent and funds have poured into the film industry.
In 1998, by chance, Wang Zhongjun learned that making TV series was lucrative, so he decisively decided to invest in the filming of his first TV series "Psychological Clinic". After the show was broadcast, the final sales reached more than 9 million yuan, the profit reached more than 4 million yuan, and the return rate was close to 90%.
Afterwards, Wang Zhongjun, who had tasted the sweetness, plunged into the film and television industry and never stopped. In 2000, Beijing Huayi Brothers Taihe Television Investment Co., Ltd. was registered and established.
Four years later, Huayi Brothers Media Co., Ltd. was established, with Wang Zhongjun as chairman and Wang Zhonglei as general manager.
Under the careful management of the Wang brothers, Huayi Brothers accelerated its capitalization process and successively obtained equity financing from Yunfeng Fund, Delian Capital and other institutions.
In October 2009, Huayi Brothers was listed on the GEM of the Shenzhen Stock Exchange, becoming the “No. 1 film and television entertainment stock in mainland China”.
At the end of 2014, three giants, Jack Ma (Alibaba), Ma Huateng (Tencent), and Ma Mingzhe (Ping An), invested 3.6 billion yuan in investing in Huayi Brothers. Among them, Alibaba and Tencent each hold 8.08% of the shares, becoming the second largest shareholder after the Wang brothers, while Ping An holds 2% of the shares.
After successively creating a series of film and television works with good commercial performance, Huayi Brothers, which has integrated the three major businesses of film, TV series and artist management, has become a leading enterprise in China's film and television industry with its content and first-mover advantages.
According to an article published by China Business News in 2019, Huayi Brothers had launched hundreds of film and television works at that time, and the total box office of its main films exceeded 20 billion yuan, ranking among the top among Chinese film and television companies.
Radical expansion "laid mines", Huayi Brothers "fell off the altar"
After the "Three Horses" entered the market in 2014, Huayi Brothers' scale expanded rapidly. The following year, the company's revenue expanded by 62.14% to 3.874 billion yuan, and the net profit attributable to the parent company climbed to 976 million yuan, the highest level since its listing.
However, the growth rate of Huayi Brothers’ net profit attributable to the parent company slowed down this year, from 51.93% in the previous year to 8.86%; while its non-net profit dropped by 12.59% to 472 million yuan.
In the following years, Huayi Brothers' revenue faced a growth bottleneck and was unable to break through the 4 billion yuan mark. Net profit attributable to the parent company also turned from profit to loss in 2018, recording a loss of 1.169 billion yuan in a single year.
In 2019, Huayi Brothers' performance further deteriorated. Not only did its revenue decrease by 41.18% year-on-year to 2.244 billion yuan, but its net profit attributable to the parent company even opened a loss hole of nearly 4 billion yuan.
Coupled with a loss of nearly 1.2 billion yuan in 2018, Huayi Brothers "spit out" all the profits accumulated since its listing in just two years.
After 2019, the sudden epidemic hit the film industry hard again, and Huayi Brothers' business conditions worsened.
By 2024, Huayi Brothers' revenue has shrunk significantly to only 465 million yuan, and in the same year it recorded a net profit loss of 285 million yuan attributable to the parent company.
Flush iFinD data shows that from 2018 to 2024, Huayi Brothers’ cumulative losses reached 8.246 billion yuan.
At the same time, Huayi Brothers' asset-liability ratio has soared from 13.25% at the end of the year of listing to 87.69% at the end of the third quarter of 2025.
According to the latest performance forecast disclosed by Huayi Brothers, the company is expected to record a net profit loss attributable to the parent company of 289 million yuan to 407 million yuan again last year; the net assets at the end of 2025 are expected to be -94 million yuan to 63 million yuan.
Huayi Brothers mentioned in the performance announcement that if the company's audited net assets at the end of 2025 are negative, according to Article 10.3.1 of the "Shenzhen Stock Exchange GEM Stock Listing Rules", the company's stocks will be subject to a delisting risk warning.
Some analysts believe that Huayi Brothers’ thunderstorm has a lot to do with its early aggressive expansion.
According to incomplete statistics from China Business News, Huayi Brothers’ offline investments are spread across Suzhou, Changsha, Jinan, Haikou and other cities. In the capital market, they have repeatedly acquired companies owned by celebrities such as Feng Xiaogang at high premiums.
For example, in July 2011, Huayi established Huayi Cinema (Suzhou) Co., Ltd., which is mainly responsible for the Suzhou Huayi Brothers Movie World project.
It is reported that the total investment in the project is as high as 3.5 billion yuan, which is more than 1.4 times the total assets of Huayi Brothers at the end of 2011. Such a large-scale investment undoubtedly brings huge financial pressure to the company.
In 2015, Huayi Brothers acquired 70% of the equity of Dongyang Meila, a 3-month-old shell company established by Feng Xiaogang, for 1.05 billion yuan. This move also laid hidden dangers for the company's future goodwill.
As the company's operating conditions continued to deteriorate, the Wang Zhongjun brothers pledged almost all of their shares in order to solve the financial problem. Subsequently, these shares were frozen and auctioned one after another.
According to Huayi Brothers’ announcement on April 3 this year, the two brothers held a total of 229 million shares in the company, accounting for 8.26% of the company’s total share capital.
As of the date of the announcement, all the shares held by the two brothers have been frozen. Among them, the two brothers have been auctioned a total of 168 million shares, accounting for 6.04% of the company's total share capital.
Can Huayi Brothers, which is facing a "bad fate", get out of its operating difficulties with the help of restructuring?