China Film Co, the distribution arm of China Film Group, is to raise up to $610 million as part of a planned IPO later this month. Documents filed today indicate that the float will take place July 28, with initial investor interest being gauged July 22-25. The company then intends to be listed on Shanghai’s stock exchange.
China Film Group will retain a two-thirds stake in the company. It currently owns 93% of China Film C0. The funds will be reinvested into the company and used to finance theatre development and production. The papers revealed the company aims to invest in 53 features and over a dozen TV dramas in the next three years. The planned float would indicate a market cap of $2.3 billion. The company reported profits last year of $130 million, repping a 73% increase on the previous year.
How the recent downturn in China’s box office fortunes will affect the IPO remain to be seen, however. After commentators had forecast China would be the world’s largest single box office market by the end of last year, overtaking North America, those expectations are being dialled down on the back of a disappointing second quarter this year, which saw the Chinese market contract by 5%, for the first year-over-year quarterly decline in more than five years.
China Film Co is still the most powerful single player in the Chinese market and dominates the distribution of all Western films, along with Huaxi.