China IPO Archives | BrokerDealer Blog

While the initial public offering market in China is percolating, it appears that film industry IPOs are not yet ready for prime time. Below BrokerDealer.com blog update courtesy of extract from 3 Feb edition of Hollywood Reporter

China Film Group’s planned $740 million stock market listing has been delayed after the state-owned colossus failed to provide sufficient documents for an initial public offering, local media reported.

Shanghai Film Group’s plans to raise $155.45 million from its listing have also been delayed because of insufficient documents, the Beijing Business News reported.

China’s film market is the second biggest in the world and has grown rapidly, and the listing of China Film Group and Shanghai Film Group is read as a sign of concerted effort to build up an infrastructure for future growth and help the industry compete with Hollywood.

However, local commentators say that regulators are trying to cool the pace of initial public offerings, as the market is becoming overheated with companies trying to gain access to the film and TV industry via backdoor investments and mergers.

A prospectus issued in June 2014 said China Film Group was trying to raise $740 million.

China Film is a giant in the Chinese film industry. In addition to producing, importing, exporting and distributing films, it also operates theater chains, sells film equipment and manages talent.

The newspaper quoted Peng Kan, research and development director of the Legend Media consultancy, saying that China Film Group had an advantage over other film companies because it provided greater distribution and also enjoyed government allowances and a favorable tax policy.

China’s biggest cinema chain, Wanda Cinema Line Co., raised $210 million in a Shenzhen stock exchange listing last month.

There are fears that regulators are trying to slow the pace of IPOs. Investors feared that IPOs had effectively been frozen before they resumed on the country’s two bourses in early 2014 after a hiatus of 14 months, allowing around 50 already approved companies to list on the Shanghai and Shenzhen exchanges.

BrokerDealer.com blog update courtesy of reporting from 3 Feb edition of Bloomberg LP.

Zhou Yahui, chairman and president of Beijing Kunlun Tech Co., became a billionaire after shares of the Internet video game developer more than doubled since its trading debut two weeks ago.

Zhou, 37, has a $1.7 billion fortune, according to the Bloomberg Billionaires Index. The stock surged by the 44 percent stock exchange limit at its trading debut on Jan. 21, and climbed by the maximum daily price increase of 10 percent for nine straight days.

The new billionaire is the second in China this week as investors are showing an increasing appetite for the nation’s initial public offerings. Kunlun Tech is also riding a rally in the Shenzhen Composite Index, which tracks equities on the smaller of China’s two stock exchanges, whose 8.3 percent return this year beat all benchmark indexes in Asia.

“Shares jumped because new stocks are rare in China’s A- share market,” said James Hu Jiaming, a Shanghai-based analyst from China brokerdealer Capital Securities Corp., adding that “online gaming has been riding a bull market since the second half of last year.”

There has been an “accelerated growth” in the online gaming industry, driven by the popularity of mobile-phone applications such as WeChat, he added.

The gains haven’t made Kunlun Tech expensive relative to its peers. The stock is trading at 34 times earnings, compared with 240 times for China’s information technology companies, according to data compiled by Bloomberg. The Shenzhen index has a multiple of 37.

Spring Airlines Co. Chairman Wang Zhenghua became a billionaire yesterday as the stock surged following the company’s initial public offering, the first for a Chinese airline since 2002.

Shares of the low-cost carrier also jumped 44 percent on its trading debut on Jan. 21 and rose by the daily limit for a ninth day today, pushing his net worth to $1.1 billion, according to the Bloomberg Billionaires Index.