Chinese TV Spy Thriller Producer Fu Becomes a Billionaire
Fu Meicheng, chairman of Zhejiang Huace Film & TV Co. (300133), has become a billionaire as shares of the maker of Chinese TV shows climbed to a record after it boosted production of its historical dramas and spy thrillers.
Huace, based in Hangzhou, China, makes and distributes programming to TV channels and video-sharing websites. Its TV production increased 65 percent to 1,075 episodes in 2012, according to its annual report. Shares have more than doubled this year on the Shenzhen Stock Exchange.
Fu, 55, has a 59 percent stake in the company valued at $1.3 billion, according to data compiled by the Bloomberg Billionaires Index. He has never appeared on an international wealth ranking.
“Huace’s productions are always popular because it has a track record for creating high-quality shows,” said James Hu, a Shanghai-based analyst at Capital Securities Corp. (6005) “TV channels in China are fighting hard for such resources in order to sell more advertising.”
Chinese TV and film producers have soared this year as a rising number of middle-class viewers generates higher demand for entertainment programming, said Hu, who has a “buy” rating on Huace stock. Shares of Huayi Brothers Media Corp. (300027), the filmmaker backed by Alibaba Group Holding Ltd. billionaire Chairman Jack Ma, have doubled year-to-date.
Huace accounted for 6 percent of China’s total production of 17,703 episodes of TV dramas last year, according to data from the State Administration of Radio, Film and Television. Its shows include “Memories in China,” a TV play about a feud between two families in the late Qing Dynasty, and “The Silent War,” a spy thriller, which featured Hong Kong actor Tony Leung and Chinese actress Zhou Xun.
Apart from TV programming, which accounted for 93 percent of Huace’s sales in 2012, the company also produces movies and operates cinemas, according to data compiled by Bloomberg. More than 96 percent of its revenue was generated in China last year. Box-office sales increased 30 percent to 17 billion yuan ($2.8 billion) in 2012, official data show.
Huace shares rose 0.3 percent to 24.43 yuan on May 27, the last day before trading was halted as the company is planning a major asset restructuring, according to regulatory filings in May and June.
Asset restructuring would probably result in an increase in the share price once trading starts again, Hu said.
Fu owns 36 percent of Huace shares directly and controls another 23 percent through a holding company, HZ Large Policy Invest Co., according to Huace’s 2012 annual report. He founded Huace in 2000 with his wife Zhao Yifang, who serves as Huace’s president and is chairwoman of HZ Large Policy Invest, according to its website.
China’s Vice Premier Liu Yandong visited Huace in May and encouraged the company to export more products. Such inspection tours and the scripted praise handed out by senior government officials are widely seen as indicators of influence.
Wei Ling, a Hangzhou-based spokeswoman for Huace declined to comment on Fu’s net worth. Fu wasn’t available for comment, she said.
Huace sold shares in an initial public offering in Shenzhen in 2010, becoming China’s first publicly held TV drama producer. Profits increased 40 percent to 215 million yuan in 2012.
“Since its listing, Huace has been able to constantly improve the quality and quantity of its TV series business,” said Zhao Yue, a Beijing-based analyst at Rising Securities Co., who has an “outperform” rating on the stock. “Other businesses and investments are also starting to bear fruit.”
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