Movie boom propels IMAX China share sale
Updated: 2015-09-24 07:33
By Celia Chen in Hong Kong(HK Edition)
IMAX Corp's China unit is banking on the Chinese mainland's fast growing movie industry for its future growth with its estimated HK$473-million initial public offering (IPO) in Hong Kong.
The share sale by IMAX China Holding Inc, which plans to list the stock on the Hong Kong bourse on Oct 8, comes amid a booming film market on the mainland.
IMAX China posted a 31-percent surge in net profit to $22.8 million in 2014, compared with the previous year, while its parent recorded a 10-percent drop in net profit to $39.7 million.
Richard Gelfond, chairman of IMAX China, believed that the current boom in the mainland movie sector is just the beginning. "We still have a long way to go in the Chinese market," he emphasized.
"We believe the Chinese mainland market, in particular, presents vast opportunities for further growth of the IMAX theater network."
IMAX China's top customer on the mainland is Wanda Cinema - the theater unit of film-to-real-estate conglomerate Dalian Wanda Group. Wanda Cinema had 117 IMAX screens across its 167 theaters as of last year, many of which are housed in large shopping malls.
IMAX China and Wanda can contribute to each other's success, said Gelfond, adding their cooperation is a very profitable business opportunity for both companies and that he's confident about their long-term relationship.
"Our success to date is attributable in part to the strong and successful partnership we have established with a number of key players across the Greater China film industry," said Chen Jiande, chief executive officer of IMAX China.
"We work with leading producers, directors and studios in Greater China to covert Chinese-language films into the IMAX format for release through the IMAX theater network," Chen said.
The company also plans to produce new products for home theater systems with TCL Group Co Ltd.
The film market's take-off on the mainland comes against the backdrop of the recent stocks rout in the country. The volatility in the mainland and Hong Kong equity markets had already forced several Hong Kong listing candidates to scrap or postpone their flotation plans in recent weeks as market turmoil hurt investor sentiment.
However, Gelfond said the uncertainties in the Hong Kong and mainland markets is not a big risk for IMAX China's IPO, adding that IMAX China is less concerned with short-term valuation but long-term development.
Hong Kong's benchmark Hang Seng Index slumped 2.3 percent on Wednesday to close at 21,302.91, while the Shanghai Composite Index gave up 2.19 percent to 3,115.89.
(HK Edition 09/24/2015 page8)