Chapter 298: Investing in Hong Kong

27 Dresses, directed by Anne Fletcher, was formed with a budget of only $30 million and no big-name actors.

Blake Lively had been hanging out with Charles lately, and their relationship was growing quickly, but Charles was preparing to leave New York.

Since New Century Financial Group on Wall Street declared bankruptcy and reorganization, many in the financial circle knew the subprime loan crisis was surfacing.

The tense atmosphere on Wall Street made Charles uncomfortable, as it felt like the calm before the storm.

The stock market hadn't crashed yet, but the pressure was immense. Charles sent Lily Ying on a vacation to the Caribbean, accompanied by Dona Williams. As for her Angel City Capital company, there was no rush. They just needed to buy stocks when Lululemon went public.

The stock prices of Fannie Mae and Freddie Mac would fluctuate, but there was no need to worry. Patience was required to gain more profits.

...

After leaving New York, Charles flew directly to Hong Kong, and revisited the Deep Water Bay mansion he purchased last year.

He reunited with Gao Yuanyuan in Hawaii after just under three months. Gao Yuanyuan moved directly into Charles's mansion in Deep Water Bay.

"Do you like it? If you like it, you can stay here whenever you come to Hong Kong," Charles said with a smile, looking at Gao Yuanyuan sitting on the sofa.

Gao Yuanyuan shook her head, "This place is known for its wealthy residents. Deep Water Bay's price per square foot exceeds 40,000 Hong Kong dollars!"

"Don't worry, I've already instructed my assistant to invest in some Hong Kong properties, all of which are high-end apartments or mid-level villas. Hong Kong's real estate is very worthy of investment," Charles said. 

Hong Kong's housing prices might drop slightly in 2009, but the increase over the next two years would surely outpace any decline.

Gao Yuanyuan looked at Charles, "Rich people are really something!"

"Oh, Red Fruit Entertainment got a quota, and Dead or Alive is scheduled to be released. Will this movie make money? It only made $500,000 at the box office in the US last year, right?"

Charles chuckled, "Don't worry, the box office here will definitely be higher than in the US!"

"The Pursuit of Happiness and Die Hard 4 are still under review and applying for quotas at the Film Bureau," Gao Yuanyuan said. Following Charles's advice, Red Fruit Entertainment quickly sent three foreign movies for review after its establishment.

"Wait for it. Once you get the quota and schedule, you can arrange for the movies to be released," Charles said. He wasn't too concerned about the small box office revenue. Iron Man and Transformers were the major foreign revenue-sharing blockbusters in China that year, with their release dates close to the US.

Hollywood movie companies weren't too concerned about the Chinese mainland box office revenue because it was too small.

The imported revenue-sharing film The Devil Wears Prada, released in China at the end of February this year, grossed 15 million yuan.

What about Capet International Pictures' share? After deducting the film fund and taxes, the share revenue was yuan, and based on the deal, Capet Pictures got 13% of the revenue.

So, Capet Pictures made 1.95 million yuan, approximately 250,000 USD from The Devil Wears Prada's box office in China.

This wasn't much higher than the price of a batch film. With China's current film market and revenue-sharing structure, it was hard to attract Hollywood's attention.

"Okay, I get it," Gao Yuanyuan said, knowing Charles had money and wouldn't care about such small earnings.

"About the Red Fruit Entertainment company, I consulted Miss Lily Ying. East Asia International holds 49% of the shares, while Lin Chi-ling and I hold 35% and 16%, respectively. The registered capital is set proportionally at 10 million yuan," Gao Yuanyuan explained to Charles.

"Ha, you guys really follow the rules!" Charles chuckled, "You're really by the book!"

"All my savings, 3.5 million yuan, went into it," Gao Yuanyuan laughed, "It was the $500,000 you gave me in Hawaii!"

"Does Lily Ying have any interest in the movie company? If you can team up with her, Red Fruit Entertainment won't lack funds," Charles said. He planned to support Lily Ying in establishing a hedge fund with at least $100 million.

"Oh, she said to see how Red Fruit Entertainment develops. After all, she's not familiar with the film industry. She came into contact with film investment while managing Dawn Investments," Gao Yuanyuan admitted. 

"Alright then, if you have any significant projects, Capet Pictures will participate," Charles added. Having Capet Pictures involved made it easier to sell overseas distribution rights or secure financing.

"If your Red Fruit Entertainment grows, you can establish your own distribution network and collaborate with Capet Cinemas to build theaters!"

Foreign companies couldn't enter China's distribution system, but Red Fruit Entertainment could form a subsidiary distribution company and partner with Capet Cinemas to build theaters.

"Distribution? Private distribution companies in China require licenses," Gao Yuanyuan pointed out.

"Well, take it slow," Charles said. It seemed that it would be best for Red Fruit Entertainment to directly acquire an existing distribution company.

"Now that I'm here, I'll help you plan which movies to invest in," Charles said, "East Asia International has 25 million yuan in funds. They can lend it to Red Fruit Entertainment for now!"

"Really?" Gao Yuanyuan's eyes lit up.

Previously, East Asia International had invested 5 million yuan to establish Red Fruit Entertainment, and Charles had also given three imported batch films.

Gao Yuanyuan and Lin Chi-ling had gathered 5 million yuan themselves!

Now, with an additional loan of 25 million yuan, they could repay it once they made money.

*****

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