China Film Jumps 91% in 1st Week After Record Entertainment IPOby
Surge extends trend of Chinese IPOs rallying in their debuts
Gains make China Film bigger than DreamWorks Animation
China Film Co., the nation’s largest distributor of movies, nearly doubled in its first week of trading after the stock rose by the daily limit every day since completing the biggest initial public offering in the country’s entertainment industry.
The unit of state-owned China Film Group Corp. rose by the 10 percent daily limit to 17.08 yuan ($2.57) on Friday, capping a 91 percent rally since the stock began trading on the Shanghai stock exchange Monday. That gives the company a market value of $4.8 billion, making it bigger than the likes of DreamWorks Animation SKG or Lions Gate Entertainment Corp.
China Film has room to rise further as new stocks in the country are soaring more than 400 percent, on average, in their first month of trading. The distributor was also priced at about 23 times earnings for its public offering, as is usually the case with Chinese IPOs, making it cheaper than the likes of Wanda Cinema Line Co.
The IPO came at a time China’s surging movie market is slowing -- the nation’s box office has fallen for three of the past four months, though it’s still up for the year, according to researcher EntGroup.