China Film plans biggest IPO in country's entertainment industry

[HONG KONG] China Film Co, the nation's largest movie distributor, is planning a 4.09 billion yuan (S$828 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 US$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 per cent in the country. As China's film market surges, it's on track to overtake the US as the largest movie market in the world by 2017.

China Film profit climbed 76 per cent to 868 million yuan last year.

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. After the IPO, the state-controlled parent's stake will fall to 67 per cent from 93 per cent, 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 US$363 million Hong Kong share sale in 2014, data compiled by Bloomberg show.

China Film had announced plans to sell shares in 2014, only to postpone it.

BLOOMBERG