HONG KONG – Chinese film and TV production group Zhejiang Huace is to buy a stake in South Korea’s top independent film distributor, Next Entertainment World, better known as N.E.W.

Huace it is paying $52.7 million (RMB323 million) for a 15% stake in N.E.W., which was founded in 2008 and has had a meteoric rise thanks to a strategy of investing in edgier content than some of Korea’s other film conglomerates.

In 2013 N.E.W. ranked as Korea’s second distributor with an 18% national market share, propelled by hits including “New World,” “Miss Granny,” “The Attorney” and “Hide And Seek.” In the year to date N.E.W. is fourth with a 10.4% share, with its biggest hit thriller “Obsession.”

The deal is being made by Huace’s recently established offshoot in Hong Kong and is structured as a new share issue by N.E.W. The deal makes Huace the second largest shareholder in N.E.W.

Additionally Huace and N.E.W. intend to set up a joint venture company which will invest in at least two feature film productions per year over the next five years.

The deal is very much in line with the current alignment of the Korean and Chinese film industries, driven by opportunity for overseas expansion by Korean companies and by a hunger on the part of Chinese audiences for Korean culture and stars.

This has led to a rapid increase in the number of co-ventures and co-productions and corporate activity. During the ongoing Busan international Film Festival the rival Chinese online video companies iQiyi and Youku Tudou each sponsored two festival parties and events.

The shares of Zhejiang Huace closed up 10% at RMB32.08 on Thursday, following the announcement.