HONG KONG – Shares offered in the initial public offering of China Poly, one of China’s leading auction, cultural and film investors, have been massively over-subscribed, possibly pointing to a change in investor sentiment towards the sector.

The mainland company is listing in Hong Kong and the retail tranche of the sale has been over-subscribed by 90 times, according to the eight brokers handling the flotation. That has caused a shortage of margin financing as small investors have drained their bank accounts in attempts to buy as many Poly Culture shares as possible.

Brokers have set an indicative price range of HK$28.20-HK$33 per share. The stock will begin trading on March 6. If the final price is set at the higher end of the scale and additional shares are issued, the company will have an initial market capitalization of US$1.05 billion (HK$8.12 billion).

As well as an auction business, Poly Culture operates 17 multiplex cinemas and has lease commitments and MOUs to build a further 25. Net profits were RMB306 million ($50.2 million ) for the ten months to end October 20013.

Brokers report that that the buying binge may reflect the recent high valuations of Chinese internet and media stocks. These in turn have been boosted by high priced tech deals such as Facebook’s takeover of WhatsApp and talk of Softbank buying Korea’s Naver.

Film producer and exhibitor Bona Film Group has seen its NASDAQ-traded shared recently hit $7.25, having spent much of 2013 trading below $5. The company reports its 2013 earnings later this week.

Mainland new media giant Sina this week reported higher than forecast earnings, but saw its shares sink 10% in trading on NASDAQ on Tuesday. Sina is understood to be looking at giving its
Twitter-like Sina Weibo platform, in which e-commerce giant Alibaba has an 18% stake, a separate US listing.

Alibaba itself is also expected to be one of the world’s largest IPOs of the year. But whether the company lists in Hong Kong or New York is still moot. A strong market debut for Poly Culture would boost the likelihood of it happening in Hong Kong.