Huayi plans IPO in Shenzhen to fund expansion
Beijing-based entertainment group Huayi Brothers, whose blockbusters The Banquet and A World Without Thieves drew large audiences across the country, plans an initial public offering in Shenzhen this year to fund expansion.
The company, founded by cartoonist and photographer Wang Zhongjun in 1994, would offer 25 per cent of its enlarged capital, or less than 100 million shares, to the public, according to chief financial officer Hu Ming.
'We have yet to file the application [for he sare sale], but everything is going as planned,' she said.
'We want to sell shares on the domestic market because we are bullish on it in the long term.'
China Securities and China Merchants Securities are managing the share offering.
In past years, Huayi has attracted strategic investors including Alibaba founder Jack Ma and Focus Media chairman Jiang Nanchun.
It will be the first movie production company to list shares on the mainland.
'The media sector is growing fast on the mainland,' said Changjiang Securities analyst Chen Zhijian.
'We will know how profitable Huayi has been when it publishes its prospectus.'
Huayi's sales have grown more than 50 per cent annually for the past three years, according to Mr Wang.
The company secured a 50 million yuan (HK$55.57 million) loan from Shenzhen Development Bank to invest in The Banquet in 2006. The movie made 130 million yuan at the box office.
Last year, China Merchants Bank extended a credit line of 50 million yuan to Huayi when it produced the civil war drama Assembly. The movie recorded ticket sales of more than 260 million yuan.
Huayi was the first mainland company to receive sponsorship from companies in exchange for promoting their products and brands in the movies.
In 2006, total investment in mainland movie production amounted to 2 billion yuan, according to government data.
Mr Wang hopes to build Huayi into a Chinese version of Warner Bros.
He said he wanted to develop Huayi into the largest private entertainment group on the mainland with revenue exceeding 10 billion yuan a year.
The company invested in Kung Fu Hustle starring Hong Kong comedian and actor Stephen Chow Sing-chi in 2004, its most profitable box-office hit that grossed more than US$100 million worldwide.
To date, Huayi's businesses encompass movies, music, television and advertising.
Coming soon
Huayi hopes to be the country's largest private entertainment group
In 2004, the company invested in Kung Fu Hustle, which made more than, in US$100m
