Alibaba Pictures has decided to take a strategic stake in Chinese film investment company HeHe Pictures, the ownership of which rests with a number of Chinese movie talents, according to Variety. HeHe Pictures’ list of owners includes big names such as singer Yand Kun, director Cao Baoping and actor Chen Kun.

Alibaba
Image source: hinglish Notes – Flickr

Second biggest shareholder in HeHe

Under the terms of the deal, two representatives of Alibaba Pictures will join HeHe Pictures’ board. A strategic partnership will be formed between the two to extensively cooperate in their current film production projects and promotion and distribution activities.

The value of the transaction has been kept a secret, but the e-commerce giant says it would own a 30% stake in the company, making it HeHe’s second largest shareholder, with the largest being the company’s founder and general manager, Yang Wei, notes Variety.

Alibaba CEO Zhang Qiang said, “We look forward to stepping up our fruitful partnership in terms of film production, promotion and distribution. By creating a healthy ecosystem for financing in the film industry, we hope to support more filmmakers and boost the development of the industry.”

HeHe Pictures has invested in movies such as Cock and Bull, Chongqing Hot Pot, The Mermaid and Skiptrace. The company plans to make investments in 20 more pictures, says Variety.

Rising cloud of Alibaba Pictures

Alibaba Pictures made its strategic investment in HeHe Pictures in May after the latter took part in the Series A financing of Alibaba Pictures’ online movie ticketing platform, Tao Piaopiao. Alibaba Pictures‘ entertainment platform has evolved into a scalable format since the start of the year, with core businesses witnessing increasing growth momentum.

Alibaba’s investment in HeHe Pictures will strengthen the synergies between the two. Alibaba Pictures’ online promotion and distribution business is steadily gaining clout in the industry, and Tao Piaopiao has become the second-largest player in the online ticketing market, with its market share still growing, notes The Slanted.

YANG Wei, chairwoman and general manager of HeHe Pictures, said, “We will strive to find the right direction for development and try to avoid mistakes as HeHe Pictures is still in its infancy.”

Alibaba Pictures’ and HeHe Pictures’ online and offline resources are highly complementary to each other, and for this reason, the strategic partnership will spur their development.

Alibaba shares are currently trading at $93. Year to date, the stock is up more than 14%, while in the last six months, it is up almost 15%.