CFG moves closer to IPO

China's largest film company moves towards Shanghai listing

HONG KONG -- China Film Group, the state-owned company that is China's largest film company, will next month take another step towards a stock market listing.

"The intermediaries have been working on the listing plans for a year and a half now. We plan to set up a joint-stock company in October and are looking at getting listed in the first half of 2010," Jiang Tao, CFG's chief financial officer said in a recent interview with Shanghai Securities News.

CFG had previously considered an IPO, but plans were blown off course by last year's global financial crisis. The company confirmed too that it had picked Shanghai as its bourse of choice – China has stock exchanges in Shanghai and Shenzhen.

It is not clear how much of the company will be sold, nor whether foreign-backed investors will be allowed to buy in. Most foreign companies cannot directly own shares listed on China's stock markets and instead buy 'H-shares' traded in Hong Kong if they are available.

Jiang said many major Chinese corporations have shown interest in buying into CFG, including China International Television Corporation, Jiangsu Broadcasting, Beijing Gehua CATV Network and China National Radio.

In 2006, CFG posted a net profit of RMB56 million ($8.2 million) and had operating cash flow of $29.5 million.

The Chinese film industry is expanding at an annualized rate of over 25% and is set to see theatrical boxoffice revenues climb from $630 million in 2008 to a forecast $788 million this year.
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