Five Jingxi executives plan to profit-take after shares rally off the back of blockbuster Wolf Warriors II
The movie, directed by Chinese kung fu actor Wu Jing, had raked in a record US$506 million in box office revenue by Monday night
Shares in Beijing Jingxi Culture & Tourism, the major film producer and distributor of hit movie Wolf Warriors II, tumbled by as much as the 10 per cent daily limit in Shenzhen on Tuesday after executives said they planned to sell a stake in the company, taking advantage of a 60 per cent rally over the past two weeks.
The stock lost 9.8 per cent to 19.07 yuan (US$2.84) at the close on Tuesday. Trading volumes were 7 per cent higher than the five-day average. The benchmark Shanghai Composite Index rose 0.1 per cent for the day.
Five executives from Beijing Jingxi plan to sell a combined 1.44 million shares, or a 0.2 per cent stake, within the next six months, citing personal needs for capital, according to an exchange filing released last night.
The stock’s previous rally was spurred by the release of Wolf Warriors II, which tells the patriotic story of how a former Chinese soldier who had been expelled from the army fought against American mercenaries, to rescue his compatriots from an African country.
The movie, directed by and starring Chinese kung fu actor Wu Jing, had raked in a record 3.392 billion yuan (US$506 million) in box office revenue as of Monday night, just surpassing 3.39 billion yuan for the market’s latest major hit, The Mermaid.
The box office for Wolf Warriors II is already more than three times the full 2016 revenues of Beijing Jingxi.
Even after the rally, the company is still valued at 24 times reported earnings, lower than the industry’s average for the multiple of 42 times, according to data compiled by Bloomberg. All the five brokerages tracked by Bloomberg rate the stock “buy”.
Shares in Beijing Jetsen Technology, another distributor of Wolf Warriors II, have advanced 15 per cent since the end of July.