Chinese film studio Bona Film Group returns to the stock exchange – IPO in Shenzhen

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• Bona Film Group already listed on NASDAQ from 2010 to 2016
• New IPO in Shenzhen
• Turning away from US stock exchanges a role model for other Chinese corporations?

Bona Film Group plans an IPO on China’s Shenzhen Stock Exchange. The film studio may be less well known in Germany, but in China last year it made the most successful film of all time, namely “The Battle of Lake Changjin”, which is about the victory of the People’s Liberation Army during the Battle of Changjin Reservoir at times of the Korean War against the USA.

Bona Film IPO in Shenzhen

So now the film studio wants to go public. However, it is not the first time that the Chinese company has taken the plunge onto the trading floor. In fact, in 2010, Bona Film Group was among a wave of Chinese companies that sought listing on the US tech exchange NASDAQ, hoping, according to Variety, that the company’s market valuation in the US would be higher given a greater understanding of the media business. However, the expectation did not materialize, so that the Chinese group withdrew from the stock exchange in 2016 and became a private company again. The step was taken by several investors, including the two Chinese tech giants Alibaba and Tencent, which are also major shareholders in the film studio. According to Variety, the largest shareholder with 28 percent is Bona Film founder Yu Dong.

Since delisting from NASDAQ, the company has repeatedly attempted a return to the trading floor, without success — until now. The studio recently published the IPO prospectus on the Chinese stock exchange in Shenzhen, where the renewed IPO is to be completed. Bona Film Group issued 275 million new shares for subscription on August 9 at a price of 5.03 yuan per share.

However, when exactly the listing should take place has not yet been announced. As reported by the South China Morning Post, China Dragon Securities is the sponsor of the IPO, along with Citic Securities.

Bona Film Group with strong figures despite zero-COVID policy

As the news portal suspects, it should not be a coincidence that the IPO is to be completed right now. China’s rigorous zero-COVID policy would have led to major losses for Chinese studios and media groups. However, Bona Film Group itself managed to increase its revenue by 82 percent year-on-year to 1.47 billion yuan in the first half of 2022. Meanwhile, profits rose 517 percent to 309.8 million yuan. According to Variety, the fact that the film studio is so successful, contrary to the trend, is mainly due to the numerous patriotic titles that the media company produces, also on behalf of the communist government.

Alibaba plans to upgrade Hong Kong listing

As the news portal writes, the decision to leave the American continent for a listing in China or Hong Kong could also inspire other Chinese companies to take a similar step. The Chinese online mail order company and Amazon competitor Alibaba is already striving to upgrade its secondary listing in Hong Kong to a primary listing that would be on a par with the listing on the New York Stock Exchange.

If approved, the move could help the company retain its status as a public company should it be forced to leave the United States. Investors could then continue to trade the paper. The continuing high tensions between the USA and China pose major challenges for internationally active Chinese companies. On the one hand, they experience pressure from the Chinese government to make less data available outside of China due to security concerns about working with the United States, and on the other hand, the corporations must comply with certain accounting standards if they do not lose their status in the United States want.

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