Bona Movie Group Prepares for IPO, Inventory Market Return
Bona Film Group, one in all China’s most constantly profitable personal sector film studios, is within the remaining levels of launching an IPO on the Shenzhen inventory trade. The corporate was behind final yr’s “The Battle of Lake Changjin,” the best grossing movie of all time in China.
The IPO transfer represents a return to public firm standing for a firm that has frequently been ahead of its time.
Bona was within the early wave of Chinese language firms to record their share within the U.S. and achieved an IPO on the NASDAQ trade in 2010, within the hope that U.S. traders and monetary markets would have a larger understanding of a media enterprise – and due to this fact accord Bona a better valuation – than if it listed in Hong Kong or mainland China.
When the journey failed to offer the anticipated increase, Bona grew to become one of many first Chinese language firms to withdraw from the U.S. securities markets. Yu Dong, the company’s talismanic founder, a distributor turned producer, took Bona private with the aid of media and tech industry investors in 2015. It’s understood that he has tried on a number of events to get Bona a brand new itemizing both in Hong Kong or on a mainland Chinese language trade.
In a flurry of some 50 regulatory filings, together with a 735-page prospectus and a 113-page abstract, the corporate has now laid out the small print of its new launch.
The corporate will promote 275 million new shares in a problem backed by blue-chip mainland companies China Dragon Securities and CITIC Securities. The quantity of recent capital it brings will solely be identified when the sale value of the shares is disclosed later this week. The counter is scheduled to begin buying and selling on Tuesday subsequent week.
Yu is the biggest shareholder with a 28% holding. Alibaba and Tencent, which participated within the 2015 delisting operation, even have main share stakes.
Whereas different Chinese language movie firms have warned of torrid instances – Huayi Bros. has endured three years of losses and Wanda Film recently warned of $85 million of losses within the first half of this yr – Bona has seen its profitability surge due its slew of hit patriotic titles. Revenues within the six months to June climbed by 82% to RMB1.47 billion ($217 million). Earnings elevated fivefold to RMB310 million ($45.8 million).
Bona’s determination to exit the U.S. inventory markets, the place Chinese language companies way back fell out of favor with traders, could now be adopted by different, far-bigger, companies.
Alibaba, which as soon as held the document for the largest IPO on the New York Inventory Trade, final week filed to transform its secondary itemizing in Hong Kong right into a joint major itemizing. The element is essential.
On one hand, Chinese language firms are below rising strain to adjust to U.S. accounting requirements in the event that they wish to retain their entry to America’s organized capital markets. However they’re additionally being hemmed in by Chinese language rules which intention to restrict switch of information outdoors China. Each international locations have nationwide safety misgivings about their presence within the U.S.
Alibaba’s determination to have a joint-primary itemizing in Hong Kong is meant to make sure that it retains public firm standing, and traders can proceed to commerce the inventory, within the occasion that it’s ever compelled to depart the U.S.
The transfer additionally has a second, vital profit, in that the Hong Kong major itemizing will permit Alibaba’s shares to be purchased and bought through the Inventory Join, a mechanist that permits two-way commerce in mainland Chinese language and Hong Kong equities and mutual funds. Till this occurs, most peculiar particular person traders in China will not be capable of spend money on the nation’s most iconic personal sector enterprise.
Alibaba shares initially surged in response to the information. However later slipped again because it grew to become clear that China-U.S. tensions are unabating and that the Chinese language financial system has slowed markedly.