A scene fromThe House That Never Dies, which is one of the most successful productions on the Chinese mainland. [Photos provided to China Daily]

During the years that followed, the company distributed 16 horror movies - the only one that didn't make money was released in 2012 but gained few screenings because it was overshadowed by the wildly successful Lost in Thailand.

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In 2008, Fujian Heng Ye began producing horror movies. The first, Illusion Apartment, released in 2010, cost 1.8 million yuan to make, but earned more than 20 million yuan at the box office. That was just the beginning.

Over the years, the company's horror movies have been successful, which has enabled it to expand into romances and other genres, and also to begin making big-budget horror flicks.

However, Fujian Heng Ye is just one of many outfits to have recognized the money-making potential of horror movies.

Zhou Yaowu, who started directing horror movies in 2010, says the appeal of horror movies lies in their violent, bloody and erotic scenes - an established formula for box office success, and one that's prompted a large number of potential investors to contact him.

Zhou's first horror movie, Harpoon, based on a survival game story, earned about 5 million yuan, even though the distributor chose the wrong market strategy and released the movie during the Spring Festival holiday in early 2012.

For the director, one of the beauties of horror movies is that they can be made with a minimal cast and simple props and settings, which lowers the investment barrier: "A few million yuan will do nothing in most genres, but it's enough to make a horror movie."

Fledgling director Xing Bo is determined to work in the genre in the early stages of his career because he thinks it will be easier to raise funds for horror movies than any other type of film.

He may be on the right track, too, because since he graduated from the Beijing Film Academy in 2012, Xing has been approached by several investors, mainly from the property sector.