Movie studio seeks Shenzhen listing
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One of China's top movie studios hopes to raise US$91 million by going public - a move that reflects the rapid expansion of the country's entertainment industry.
The China Securities Regulatory Commission said it will review on Sunday Huayi Brothers Media Corp's application to list on the Shenzhen Stock Exchange's ChiNext, a trading board for smaller companies expected to launch later this year.
Huayi Brothers said in a prospectus issued by the Shenzhen bourse yesterday that it plans to sell shares for a 25 percent stake in the company, with the goal of raising 620 million yuan for movie and TV production.
The amount is tiny by international standards, but shows the country's rapidly growing entertainment industry is entering a new stage of development.
The prospectus marks a rare financial disclosure by Huayi Brothers, shedding light on the inner workings of one of the country's most successful entertainment companies.
Founded in 1994 by brothers Wang Zhongjun and Wang Zhonglei, its portfolio includes film and TV production and talent management. Among its best known works is 2008's "The Forbidden Kingdom," a co-production with Hollywood that was the first on-screen collaboration between action stars Jackie Chan and Jet Li.
Its recent hits include the war film "Assembly" and romantic comedy "If You Are The One," which made more than 300 million yuan at the Chinese box office. Huayi Brothers produced five top-10 hits in China from 2006 to 2008, a 12 percent market share. China's leading state-run film company, China Film Group, enjoyed a 17 percent market share in the same period.
Huayi Brothers said its net profits have surged in recent years, nearly tripling from US$3.5 million in 2006 to US$10 million in 2008. It reported a profit of US$4.6 million for the first six months of 2009.
Those figures pale in comparison with Hollywood - Time Warner's entertainment divisions earned an operating income of US$823 million last year.
But China's movie market is growing rapidly. The Chinese box office grew nearly fivefold from 2003 to US$630 million in 2008, and the number of movie screens jumped 16 percent last year to nearly 4,100.
Movies accounted for about 28 percent of Huayi's revenue in the first half of this year and TV 55 percent.
In its prospectus, the company said it also wants to build 15 multiplexes over the next five years.
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