Enlight Media raised $219 million through its Shenzhen’s IPO

4 August 2011 15 h 30 min 2 comments

Shares in Beijing Enlight Media Co Ltd, a private TV & Film production company, surged more than 40 percent from the offering price of 52.5 yuan ($8.16) on its stock market debut on Wednesday. The shares closed at 74 yuan, against an opening price of 70.88 yuan, in an initial public offering (IPO) on the Shenzhen’s Growth Enterprises Market, China’s Nasdaq-style market. 

Enlight Media sold some 27 million shares representing a quarter of its issued capital, and raised RMB1.42 billion ($219 million).

Wang Changtian, founder and chairman of the company, will indirectly hold 56.2739 million shares.

Enlight Media submitted its application for listing in GEM of Shenzhen Stock Exchange to China Securities Regulatory Commission (CSRC) on June 30, 2011. It planned to issue 27.40 million shares, such move. The CRSC approved its listing application on June 17, 2011.

The IPO prospectus shows that the company intends to fund only around CNY 400 million for TV program making, TV play buying and expansion of digital studio. Wang Changtian, president of Enlight Media, said the company will “mainly use IPO proceeds to improve the content of its TV programs and expand its distribution network”. He said to China Daily the company has no plans to build or operate cinemas itself, but it doesn’t exclude the possibility of investing in or acquiring theater chains.

In the next three years, Enlight Media plans to produce three to five movies a year with its investment and distribute 10 to 20 domestic films, through its Enlight Pictures Co Ltd division so as to maintain its No 3 position in the film industry. 

Enlight’s total revenues for 2010 reached were RMB480 million ($74.1 million), up 25% on 2009, with net profits of RMB113 million ($17.4 million) an 80% increase on 2009.

“China’s advertising market continues to grow rapidly, which is good news for companies that generate revenue from advertising, such as Enlight Media”, said to China Daily Sun Jin, an analyst with China Galaxy Securities Co Ltd. Revenues for traditional advertising, which excludes the Internet, reached 584.76 billion yuan last year, with 77 percent going to television, according to Charm Communications Inc, a leading advertising agency. 

Fourth IPO in Chinese film and TV

The company is the fourth Chinese film and TV company to make an initial public offering route and the third after Huayi Brothers Media Corp and Zhejiang Huace Film & TV Co Ltd to list its shares on a local stock market. The 4th one, Bona Film Group Ltd, listed its shares on the NASDAQ exchange in the US.

Market capitalization of the 4 listed Chinese TV & Film companies

Enlight

Huayi Brothers Media Corp

Zhejiang Huace Film & TV Co Ltd 

Bona Film Group Ltd

World’s third-largest entertainment and media market

According to analysts, as the country’s media and entertainment industries keep growing, more companies in this sector will turn to the equity markets to raise funds, for expansion.  According to a report by PricewaterhouseCoopers, China is expected to overtake Germany this year as the world’s third-largest entertainment and media market with total revenues of $96 billion

Chen Shaofeng, vice-dean of the Institute for Cultural Industries at Peking University, forecast in China Daily that “some 120 to 150 companies in the sector might go public from this year to 2015, boosted by the development of the cultural industry in recent years”. Other Tv & Film makers or distributors, such as China Film Group Corp, and cinema operators, including Wanda Cinemas, have said that they are preparing for IPOs. 

SOURCES: China Daily, Sina.com, SinoCast Daily Business Beat, menafn.com  (4/08/2011)

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