China Film Plans Nation’s Largest Entertainment-Industry IPO

  • Share sale to raise as much as $611 million, filing shows
  • Proceeds to be used in movie production, investment in cinemas

China Film Co., the nation’s largest movie distributor, is planning a 4.09 billion yuan ($611 million) initial public offering in what would be the biggest IPO in the country’s entertainment industry.

The unit of state-owned China Film Group Corp. plans to offer as many as 467 million shares to be listed on the Shanghai Stock Exchange, according to a filing Wednesday. The company will begin gauging investors’ interest from July 22-25 and start the offering July 28. Proceeds will be used for movie production and investments in cinemas, according to the company.

The sale would help fuel China Film’s expansion in the country’s estimated $180 billion media and entertainment industry, while competing against the likes of billionaire Wang Jianlin’s Dalian Wanda Group Co. Movies are among China’s fastest-growing sectors as the country seeks to transform into a more consumer-oriented economy from one largely reliant on heavy industry.

China Film’s key business is movie distribution, where the company has a market share of 58 percent in the country. As China’s film market surges, it’s on track to overtake the U.S. as the largest movie market in the world by 2017. China Film profit climbed 76 percent to 868 million yuan last year. 

To read about Wanda’s global entertainment acquisitions, click here.

The sale would help fund China Film’s expansion plans, which include the production of 53 movies and 14 TV dramas, as well as the addition of 91 theaters in the next three years, according to the company. The state-controlled parent, the nation’s sole authorized importer of foreign movies into China, will see its stake fall to 67 percent from 93 percent after the IPO, the company said.

The offering could be the biggest IPO from the Chinese entertainment industry, surpassing theme-park operator Haichang Ocean Park Holdings Ltd.’s $363 million Hong Kong share sale in 2014, data compiled by Bloomberg show.

China Film, which has hired China Securities Co. to arrange the IPO, had announced plans to sell shares in 2014, only to postpone it.

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