NEW YORK (TheStreet) -- Time Warner  (TWX)  announced on Sunday that its Warner Bros. studio will begin to make Chinese-language films. 

Time Warner and private-equity firm China Media Capital reached a deal to shoot films in Chinese as part of a Hong Kong-based joint venture called Flagship Entertainment Group, the companies said in a statement.

Warner Bros. will own 49% of Flagship Entertainment Group, allowing it greater insight into China's growing movie market, which is the world's second largest, according to The Wall Street Journal.

The venture will make use of Warner Bros.'s distribution network and produce movies including tentpole, or big-budget films, the companies said in a statement. The first films could be released as early as next year.

Studios such as Paramount Pictures, DreamWorks Animation (DWA) , Lions Gate Entertainment (LGF) and Walt Disney (DIS - Get Report) also have made deals with local Chinese studios, since co-productions that meet certain criteria are exempt from China's restriction on the number of foreign movies that can be shown in local theaters each year, according to Reuters.

Time Warner is a media and entertainment company based in New York City.

Shares of the company are down by 0.39% to $69.37 in early morning trading on Monday.

Separately, TheStreet Ratings team rates TIME WARNER INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

"We rate TIME WARNER INC (TWX) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, expanding profit margins and good cash flow from operations. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • TWX's revenue growth has slightly outpaced the industry average of 6.5%. Since the same quarter one year prior, revenues slightly increased by 8.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The debt-to-equity ratio is somewhat low, currently at 0.99, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.21, which illustrates the ability to avoid short-term cash problems.
  • TIME WARNER INC has improved earnings per share by 23.4% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, TIME WARNER INC increased its bottom line by earning $4.39 versus $3.56 in the prior year. This year, the market expects an improvement in earnings ($4.66 versus $4.39).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Media industry average. The net income increased by 14.2% when compared to the same quarter one year prior, going from $850.00 million to $971.00 million.
  • You can view the full analysis from the report here: TWX