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Wanda seeks to raise $203m in scaled-back IPO

2015-01-13 10:29 Global Times/Agencies Web Editor: Qin Dexing

China's biggest movie theater operator Wanda Cinema Line Corp is seeking to raise 1.26 billion yuan ($203.26 million) through an IPO, scaling back its original listing plan, Reuters reported Monday, citing people with knowledge of the matter.

The chain controlled by Dalian Wanda Commercial Properties Co Chairman Wang Jianlin, one of China's richest men, had planned to raise up to 2 billion yuan through the Shenzhen listing, according to a prospectus published in 2014.

The source said Wanda Cinema is now seeking about 21 yuan a share - less than originally planned - following guidance from the stock market regulator, the China Securities Regulatory Commission (CSRC), which has been trying to tighten IPO sales.

The theater operator is offering 60 million shares, or around 10.7 percent of the company.

"Wanda Cinema doesn't care how much it will raise in the IPO," said one of the sources. "The key [reason] of the listing is to open doors for the company's future development and expansion."

The people declined to be named as they were not authorized to speak to the media. A Dalian Wanda spokesman declined to comment, citing the quiet period ahead of the IPO.

BOC International (China) Ltd is the lead underwriter of the IPO, which starts on Wednesday. Wanda Cinema has said it will use the funds to help open 50 new cinemas.

While China is moving to allow more companies to get listed on its stock exchanges, the CSRC has since 2014 tried to control IPO pricing to reign in insider trading. This has dampened prices for many IPOs, and created an extraordinarily bullish secondary market for newly issued shares.

The smaller fundraising would see Wanda Cinema sell its shares at a price-to-earnings ratio of about 20. A more reasonable valuation would be in the range of 43.8 yuan to 58.4 yuan, said Zhang Heng, an analyst at Industrial Securities.

"Under the current pricing system, its shares have significant room to surge on the secondary market," he remarked.

The IPO fits in with the ambitions of billionaire Wang to control 20 percent of the global box office by 2020.

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