China Film Group's $700M-Plus IPO Back on Track (Report)

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Beijing

The state-backed Chinese film behemoth has attempted go public at least three times before.

After several false starts, China Film Co., part of the Chinese state-backed film colossus China Film Group, is again planning an initial public offering on the Shanghai Stock Exchange.

The IPO will go forward sometime later this year, depending on when regulators deem market conditions favorable, a banker from the company's underwriting team said Tuesday, according to a report in China Daily, a state-backed news outlet.

China Film has postponed its IPO at least three times. In a prospectus last July, the company announced plans to list 467 million shares on the Shanghai Stock Exchange, which would raise $714.4 million (4.6 billion yuan). But the IPO was postponed when China's stock markets hit a rough patch. According to local press, China Film's earlier listing plans remain intact. 

According to the filing, 27 percent of the capital raised would be invested in film and TV production, while 26 percent would go toward building more digital cinemas.

"The securities authority will consider market conditions and greenlight the IPO when timing is ripe," Xu Jiongming, managing director of CITIC China Securities, told China Daily.

China Film Group is the dominant player in China's booming movie sector. It has monopoly control of the import and distribution of all foreign films and it produces and distributes many local Chinese movies, as well as operating theater chains, selling film equipment and managing talent. The company has recently begun making investments to stimulate China's movie merchandising sector, an underdeveloped but high-potential area of the local film business.

China's film market is the second-biggest in the world and continues to expand rapidly. Last year, the box office amounted to $6.8 billion. A listing by the state film giant is a sign the government plans to retain its central position in the country's film sector and future box office growth.  

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