Hong Kong-listed shares of Alibaba Pictures rallied 37% to HK$3.48 on Wednesday after the company said its parent is planning to inject assets in the entertainment firm. The asset injection may help Alibaba Pictures solve its financial troubles. New York-listed Alibaba is planning to inject its online movie ticketing unit and film production financing arm into the Hong Kong-listed entity.

Alibaba Pictures Jumps 37% As Parent Plans To Inject Assets

The injection may give Alibaba Pictures a much-needed boost

The Hangzhou-based e-commerce giant launched both businesses being considered for injection in 2014. They are still in the early stages of development. Alibaba Pictures chairman Shao Xiaofeng said in a Hong Kong stock exchange filing that no agreements have been signed yet. There is no timeframe for the possible business injection, reports the South China Morning Post.

Alibaba’s Hong Kong-listed film studio has seen a significant rise in its stock before trading was halted on March 24 for two weeks. Analysts said that the rally in the stock showed investor enthusiasm as the new assets could transform Alibaba Pictures from a loss-making venture into an entertainment behemoth. The asset injection will allow it to control the entire chain from financing to production to distribution of movies and other content.

Alibaba aims to build an entertainment giant

In March 2014, Jack Ma-led Alibaba acquired 60% stake in China Vision Media for $804 million and renamed it Alibaba Pictures. Trading of Alibaba Pictures shares was suspended for five months last year due to accounting irregularities, which was blamed on the previous management team. Jack Ma has said that he wants to build an entertainment business that produces original films and programming.

Alibaba Pictures has signed production and distribution agreements with a number of media companies, but it is yet to produce anything. Despite the asset injection from its parent, making money would take time for the company. That’s because it will have to invest in the new businesses.