‘China’s Miramax’ Gets Green Light for Homecoming Listing

Bona Film Group Ltd., known as “China’s Miramax,” has obtained a long-awaited green light from China’s securities regulator for a public listing in Shenzhen, eight months after authorities knocked back its previous attempt due to a lack of detail.

The film studio and cinema operator hopes to raise 1.42 billion yuan ($215.3 million) by offering some 122 million shares, according to its prospectus. Bona plans to invest the funds in making new movies and renovating its cinemas, including upgrading their projectors.

The China Securities and Regulatory Commission (CSRC) announced the approval Thursday, marking a significant step forward in the firm’s three-year bid to raise money from Chinese mainland investors.  

The country’s oldest private film distributor, Bona was originally the first Chinese entertainment company to list overseas. It spent six years on New York’s Nasdaq stock exchange before it privatized itself in 2016, hoping to relist at home with a higher valuation, but encountered a range of difficulties along the way.

Chinese regulators ground a previous attempt to a halt early last year, citing 38 different issues with its prospectus and telling the company to disclose more information about its operations. The company filed a revised prospectus in August with more detailed data on its business, operation status and shares changes.

China’s film industry has been one of the sectors hit hardest by the coronavirus, with most cinemas closed for almost half a year before they were allowed to resume business in July. Going six months without box office revenue has put immense financial pressure on Bona, which had to continue paying expenses with little money coming in the door. Bona expects its revenue to drop 31.7% to 2.13 billion yuan this year, and forecasts its profits will plunge 44% to 176 million yuan.

But before the pandemic, it had three years of robust, steady profit growth. Its profit surged to 315 million yuan on revenue of 3.12 billion yuan last year, jumping 58% and 56% respectively from 2017.

While it is run as a subsidiary of combination military arms dealer and art auctioneer Poly Group Corp., founder and CEO Yu Dong is the actual controller and controlling shareholder of Bona, with a 28.03% stake in the company. Many of the remaining shares are held by big film industry names like Alibaba Pictures Group Ltd., Tencent Holdings Ltd. and Wanda Film Holding Co. Ltd., which control 7.72%, 4.84% and 1.88% respectively.

As of the end of 2019, Bona directly managed 79 theaters nationwide and owned 654 movie screens, including those in partner cinemas.

The company made headlines in July, when its vice president and chief of cinema operations Huang Wei died after falling off a building. The company said in a statement that he had suffered from long-term insomnia and depression due to health issues.

Contact reporter Anniek Bao (yunxinbao@caixin.com) and editor Gavin Cross (gavincross@caixin.com)

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