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BUSINESS & TECH

Bona Film in Public-Listing Sequel Back Home

By Shi Rui and April Ma

(Beijing) — Bona Film Group Ltd., China’s first entertainment company to list on an overseas stock market, has started working toward an initial public offering on the mainland in hopes of finding better valuation at home.

The film distributor and producer, which privatized and delisted from America’s Nasdaq exchange last year, said Wednesday that it has started to lay the groundwork for a China IPO by launching a six-month instruction program with potential underwriter Citic Securities. The company did not say how much it hoped to raise from domestic investors.

Working with an underwriter for several months is required by Chinese regulators before a company can list on the Shanghai or Shenzhen exchange.

The step toward a domestic float comes six months after Bona raised 2.5 billion yuan ($363 million) from investors including Alibaba Pictures and Tencent Holdings Ltd. The injection increased the company's valuation to 15 billion yuan.

Alibaba Pictures and Tencent each played a leading role in the company’s privatization in April 2016.

Alibaba Pictures held an 8.24% stake in the company after last year’s funding round, according to Bona’s 2016 financial report. Tencent’s stake in the company has not been disclosed. Other big stakeholders include Fosun International, which now controls about 20% formerly held by 21st Century Fox Inc., Bona CEO Yu Dong and Sequoia Capital.

Bona executives were disappointed by international investors during the company’s five years on Nasdaq. Yu once complained to Chinese media that the company had raised a mere $100 million from the bourse’ generally aloof investors, while rival filmmaker Huayi Brothers had raised more than 13 times that amount during the same period by trading on the Shenzhen bourse.

After completing the program with Citic, Bona can apply to the China Securities Exchange Commission for permission to launch an initial public offering. Its application must also be reviewed by the commission’s Public Offering Review Committee.

Contact reporter April Ma (fangjingma@caixin.com)

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