The culture and auction business unit of the powerful state-owned company Poly Group is preparing to choose Hong Kong for its public listing soon after it abandoned its planned IPO at the Shanghai Stock Exchange earlier this year amid regulatory uncertainties on the mainland. The Poly Culture Group, whose parent company is the Poly Group – a state-owned conglomerate with business in arms export, real estate and mining, among other things -- plans to raise around US$100 million via an initial public offering of shares in Hong Kong, sources familiar with the situation say. If successful, Poly Culture would become the first major Chinese auction house to go public outside the mainland, helping it raise its international profile after the Beijing-headquartered firm has been engaged in rapidly increasing competition over recent years with global players such as Christie’s and Sotheby’s. “If everything goes smoothly, Poly will be able to have its listing hearing in Hong Kong as early as in November,” said one source. “This is the preliminary schedule. Of course, if the market environment suddenly changes, the deal might be delayed until next year.” Poly Culture has three core business lines: art auction and management, theatre management, and investment in the movie and television business. It is a rising star in the global art auction industry. The company became famous worldwide after its museum in Beijing became the new home for historic bronze sculptures of ox, tiger, monkey and pig heads looted from the Old Summer Palace in Beijing by British and French invaders in 1860. The thefts took place during the Second Opium War, in which the Qing dynasty government was defeated. Poly’s ambition for an IPO for its cultural and auction business began about three years ago but little progress was made. China’s domestic A-share IPO market has been de facto suspended for around a year as the securities regulator works on new rules to make public listings fairer and more efficient. Initially, Poly was very keen to list its cultural and auction business on the Shanghai Stock Exchange and it hired CITIC Securities, the mainland’s No1 brokerage, to help it prepare, the sources said. “But later the senior management of Poly changed their mind. They say they simply can’t wait forever and nobody can clearly tell when the IPO business on the mainland will be resumed and by how,” said one of the sources. “There are still a lot of regulatory uncertainties, so to go public in Hong Kong naturally becomes a very good Plan B for Poly.” Poly Group was founded in early 1980s by the People’s Liberation Army and several big state-owned enterprises including China International Trust and Investment Corporation, later renamed CITIC, as one of China's largest state-owned arms traders. The Poly Culture Group culture and auction business was established in the early 2000s. The group also operates a real estate business, already listed in Hong Kong and Shanghai.