China’s state-run film colossus China Film Group is finally ready to seek a stock market listing after years of delay — likely sparking a major uptick in production.
“All the preparation work has been completed, and hopefully, China Film Group will be listed on the Shanghai A stock index this year,” CFG veep Shi Dongming said in a rare interview Wednesday with Daily Variety. He did not give details of the capital to be raised through the listing but said it would be used to fund expansion.
CFG first considered a listing on the Hong Kong Stock Exchange in late 2004, but the idea was nixed in August 2005 by the State Administration of Radio, Film and Television. Two years later new chairman-CEO Han Sanping revived the plan.
The question is, will this give Hollywood more access to China’s huge market?
In December, the appeals body of the World Trade Organization upheld an earlier ruling against China’s restrictions on imports of U.S. films, rebuffing Beijing’s claim that the restrictions were necessary to protect public morals.
Shi pointed out that the quota of 20 foreign movies allowed into China annually on a revenue-sharing basis had already been exceeded in the past few years.
“The number of screens, theaters and audience figures keep increasing, and every year we have more films released. The number of imported films is rising,” he said.
A few companies have made some inroads into the more liberalized biz in recent years, including Disney and Warner Bros., which both have deals with CFG — a giant in the local film industry.
Org controls the lion’s share of coin, the production facilities and the talent, and it decides who makes what pics and when.
Its net profits rose last year by 566% to 100 million yuan ($14.7 million), Shi said, also predicting 40% annual revenue growth.
Last year’s B.O. in China was $920 million, he said — a figure that could reach between $2.9 billion and $4.4 billion within five years. “It will bring hundreds of billions to the overall industry,” he said.
“Between now and 2012 will be critical years for Chinese film and for China Film Group. Since the success last year of ‘The Founding of a Republic,’ we are planning three or four politically themed films, as well as kung fu films, movies about urban life and arthouse films, because we have a broad palette. We hope to make a big-selling movie every month,” he said.
Last year, 11 domestically produced movies breached the 100 million yuan ($14.65 million) threshold, and six of those were produced by CFG. “That’s one film every two months making more than 100 million (yuan),” he said. “I hope the next three years will be a great leap forward for China Film Group.”