China's Wanda seeks to raise $203m in scaled-back IPO

China mogul's cinema chain gets nod for mainland IPO

A Wanda cinema in Zhengzhou, capital of Henan province, July 11, 2014. [Photo/CHINA DAILY]

Wanda Cinema Line Co Ltd, a movie theater company controlled by Chinese real estate mogul Wang Jianlin, received approval for a share-offering in China in which it hoped to raise up to 2 billion yuan (US$325.6 million).

The listing approval was announced late Nov 28 by China Securities Regulatory Commission.

China's box-office takings, which reached 22 billion yuan last year, are growing 30 percent annually, according to Beijing-based market research firm EntGroup Inc.

The China Film Producers' Association has said China will overtake the US as the world's biggest movie market within three years.

Wanda Cinema plans to use the bulk of its IPO proceeds to build theatres, the company said this year in a regulatory filing. As of June 30, according to Wanda, it had 150 motion-picture houses with 1,315 screens in more than 80 Chinese cities.

Revenue at Wanda, which controls 14.5 percent of the market, increased 33 percent to 4.02 billion yuan last year while profit grew 55 percent to 604.8 million yuan.

"Wanda has a very strong capital background and it builds cinemas at a very fast pace," said Liu Cuiping, deputy research manager at EntGroup.

Wang, chairman and founder of Dalian Wanda Group, holds 68 percent of the theater chain. Wang's four brothers and his son jointly own a 3.4 percent stake, according to the filing.

In 2012, Wanda bought US cinema chain AMC Entertainment Holdings Inc for $2.6 billion, including about $2 billion in assumed debt. The deal was the largest overseas acquisition by a privately-held Chinese firm and Wanda's first investment outside of China. A year later, AMC raised $332 million in its own US share sale.

In August, Wanda announced it had won the bid for a plot of land in Beverly Hills and would spend $1.2 billion for a development there as its "first important step into Hollywood".

Dalian Wanda Commercial currently operates 100 shopping plazas and 60 five-star hotels across China, according to the company's website.