Chinese tech giant Tencent Holdings is now a shareholder of Hollywood film studio STX Entertainment.

According to Sky News, Tencent Holdings, and Hong Kong's media firm PCCW are among the investors in a new round of funding by STX Entertainment. Details of the said deal are likely to be released this week, sources revealed.

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STX Entertainment has also established Chinese connections. In fact, it has signed a deal to produce 18 movies with China's Huayi Brothers. If the deal is confirmed, both Tencent and PCCW will join STX Entertainment's long list of shareholders including Chinese private equity firms Hony Capital and TPG Capital.

Both Tencent and STX Entertainment refused to comment about the report on Tuesday.

STX Entertainment has produced a slate of movies including the horror/thriller films The Gift and The Boy as well as its latest release Bad Moms, which star Mila Kunis. Tencent's deal with STX Entertainment, on the other hand, is its most recent investment after it has acquired Clash of Clans developer Supercell in July for over $10 billion.

A number of high-profile investments in China have sought to capitalize on the country's flourishing entertainment industry. Last month, Alibaba Pictures announced that it is partnering with Wuhu Gopher Asset Management to launch a $300 million investment fund to be allocated to the entertainment sector. The joint venture will be known as the Hainan Alibaba Pictures Entertainment Industry Investment Fund.

Dalian Wanda, owned by China's richest man Wang Jianlin, agreed to buy Odeon and UCI Cinema Groups from Guy Hands' Terra Firm Capital Partners for $1.31 billion. It also agreed to acquire Beijing-based movie e-commerce, news and ticketing portal Mtime for $350 million to expand its digital entertainment portfolio.

TagsTencent, STX Entertainment, Hollywood studio, entertainment industry, PCCW