Xu Zheng sells movie revenue rights to 21 Holdings for 1.5 billion yuan, securing a stake in the company while innovatively reshaping film financing.

Target Information

The deal centers around Xu Zheng, a prominent Chinese director and actor, who strategically leveraged the movie "港囧" (Lost in Hong Kong) as both a film and a financial asset. Before the film's release, Xu sold 47.5% of its net box office revenue rights to a Hong Kong-listed company, 21 Holdings, in exchange for 1.5 billion yuan. This not only provided immediate cash flow for Xu but also positioned him as the second-largest shareholder in 21 Holdings, with a personal stake of 19% in the company.

Xu's innovative approach marks a significant intersection between the film and capital markets, allowing him to secure financial backing ahead of the film's performance. This strategic financial maneuver will likely have lasting impacts on how the film industry operates in terms of securing funding and capitalizing on early revenue streams.

Industry Overview

The Chinese film industry has experienced significant growth and transformation in recent years, becoming one of the largest in the world. This industry has seen a surge in box office revenues, making it a lucrative space for both directors and investors. Factors su