China’s largest film studio, state-owned China Film Group, has confirmed plans to list on the domestic stock market by year-end.
Box office business has been booming in China, hitting close to $1 billion in 2009, with China Film Group sharing revenues with much smaller domestic competitors and a limited number of foreign films allowed into the country.
The local movie industry also has been expanding, and China Film Group has become bolder, creating big-budget films such as the patriotic The Founding of a Republic and historical drama Confucius.
On Friday, deputy chief executive Shi Dongming told Western reporters that auditors have finished going over China Film Group holdings in preparation for listing on the Shanghai stock exchange.
He said China Film Group was “waiting for the right time to list” and did not say how much the company hoped to raise on the market. He projected plans would be in place by yearend.
This is the second time the studio has announced plans to list: a proposal for a Hong Kong listing in late 2004 was not approved by the State Administration of Radio, Film and Television.
Another Chinese studio — Huayi Brothers Media Corp. — is already listed in Shenzhen on the small companies market. And Beijing Polybona Film Distribution Co. has announced it will seek a listing in New York.
China Film Group’s move into the market, however, is likely to be have more impact. In addition to being China’s largest studio, it currently exercises control over who makes what pictures, has a huge distribution network controlling half of China’s screens, and it has a significant hand in foreign joint venture production.
Its net profits rose 566 per cent to 100 million yuan ($14.6 million) in 2009, and the company is predicting 40 per cent growth a year.
Of 11 Chinese films that made more than $15 million at the box office last year, China Film Group made six.
And the number of cinemas in the country is also increasing, with 600 screens, many of them digital and HD, added last year, bringing the total to 4,700. There is plenty of potential for more expansion as a new middle class emerges in previously underdeveloped parts of the country.
A major infusion of cash from China’s stock markets could mean significantly more production by China Film Group.
The Shanghai market is closed to foreigners, except for some institutions, but the Chinese are enthusiastic investors.
The listing could also help to loosen China’s rules about the import of foreign films. China has had a quota of 20 films a year, but the World Trade Organization has ordered it to stop that practice.
Shi pointed out that the number of foreign films admitted to China has in fact exceeded 20 in the past few years. Among the huge success stories are Avatar, Transformers: Revenge of the Fallen and 2012.
With files from The Associated Press
No comments:
Post a Comment