Shares of China’s largest cinema operator, Wanda Cinema Line, soared Thursday in their Chinese stock market debut.
They rose to reach the stock exchange-imposed limit of a 44 percent gain during the trading debut on the Shenzhen exchange in the latest sign of the appeal of the entertainment industry among investors there.
Wanda Cinema shares opened at $4.95 (30.74 yuan), compared with the $3.44 (21.35 yuan) initial public offering (IPO) price. The company was selling around 60 million shares, amounting to a stake of around 10.71 percent of the company.
The cinema operator is a subsidiary of real estate giant Dalian Wanda group. The company is involved in cinema construction, film distribution and screening and related business such as advertising. Dalian Wanda in 2012 bought North America’s second-biggest theater chain, AMC Entertainment, for $2.6 billion.
Wanda has earmarked $200 million of the proceeds from the IPO to expand its exhibition network to 260 theaters and 2,300 screens by the end of next year.
The company had originally planned to raise $325 million from the IPO, according to a prospectus published last year. While no reason for the smaller target was given, the figure was probably scaled back because of a tightening on IPOs and their pricing by the China Securities Regulatory Commission, which is managing stock market listings. A first effort in July to file for an IPO on the Shenzhen stock exchange was suspended because of insufficient documents.
In August, the group said it was spending $1.2 billion to develop its Hollywood presence after it won a bid for a plot of land at 9900 Wilshire Boulevard, Beverly Hills, for the HQ of its U.S. entertainment business.
Wanda Cinema is 68 percent owned by Wanda Investment, in which China’s richest man, Wang Jianlin, owns 98 percent. This week, Wanda officially announced an investment of $52.18 million to take a 20 percent equity stake in Spanish soccer club Atletico Madrid. The deal will give Wanda a seat on the club’s board of directors and marks the first time a Chinese company has invested in a top-flight European soccer club.
Wang said the deal would help promote the development of “China’s Future Star Program” in Spain and at the same time would support the overall expansion of soccer in China.