Shifang shares nosedive after reports Beijing is investigating Ip Man 3 box office takings
Film reportedly took a record day one box office of 150 million yuan
Shares of Shifang, which owns rights to the Ip Man 3 martial-arts film, hit a one-year low on Thursday after media reports Beijing was investigating alleged box office ticketing fraud.
The company plunged 59 per cent from Wednesday’s close to 76 HK cents shortly after the lunch break on Thursday, but the loss narrowed to 36.70 per cent when the market closed for the day, with the stock last trading at HK$1.19.
Louis Tse Ming-kwong, a director of VC Brokerage, said Shifang, an investor in the film, would still be affected by the investigation even though it was not the film’s distributor.
“The company, as an investor in the film, would share any earnings from the box office tickets sales,” he said. “If the investigation found out the box office tickets sales were inflated and not as high as those reported, then Shifang would also receive less from the box office. This is why investors are selling the shares.”
Castor Pang, the head of research at Core Pacific Yamaichi Hong Kong, said investors were panic selling the company on reports of the investigation.
“The share price is expected to go down further as the investors can do nothing,” he said.
Ip Man 3 opened in mainland China on March 4, and reportedly took a record day one box office of 150 million yuan (HK$178.70 million), which spurred Shifang’s share price to 22.03 per cent rise on the day. The film was reported to have collected 480 million yuan at the box office on its first three days in theatres, during what is traditionally a slow movie-going period.
Doubts were cast on the film’s surging box office revenue after some mainland media reports, including one by the official Xinhua news agency on March 7, that mainland China’s State Administration of Press, Publication, Radio, Film and Television was investigating alleged box office fraud.
The reports said tickets for the film were sold at unusually high prices, with some saying theatres were full of empty seats in early and midnight showings even though they had supposedly been sold out.
The company’s shares have dropped 79 per cent since Tuesday even though Shifang said on Tuesday it was only an investor in Ip Man 3 and was not participating in any distribution or release activities for the movie on the mainland.
Shifang said in a filing to the Hong Kong stock exchange on Tuesday that some online media reports on Monday about the movie’s box office results on the mainland might have “greatly affected the reputation of the company”.
Greater China Financial, which acquired an additional 17.06 million Shifang shares last month, has also been affected by the news, with its share price dropping 35.96 per cent on Thursday to close at 57 HK cents.
The mainland movie industry is booming, with last month’s ticket sales in China exceeding those in the United States. Total box office ticket sales jumped nearly 50 per cent year on year to 44 billion yuan last year, and analyst say the mainland movie market is on pace to become the world’s largest by 2017.