Listing of culture firms had been on cards for several months, but got delayed due to the financial crisis. [Peng Xiaoping]

China plans to encourage State-owned culture industry heavyweights to go public as part of its reforms for the culture industry.

The State-owned China Film Group Corp (CFGC), Shanghai Film Group Corp, and some industry heavyweights are vying with each other to be the first listed company in the industry, a top official from the culture department said recently.

"We intend to foster industry integration and allow qualified companies to raise capital from the equity market," Zhu Hong, spokesman, State Administration of Radio Film and Television (SARFT), said in a recent report.

Though the plan has been in the offing for several months now, it got delayed due to the global financial crisis.

"The intermediaries have been working on the listing plans for a year and a half now. We plan to set up a joint-stock company in October and are looking at getting listed in the first half of 2010," Jiang Tao, chief financial officer with CFGC, said in a recent interview with Shanghai Securities News.

According to Jiang, a group of strategic investors are keen to invest in the company. These include Beijing Gehua CATV Network Co and China International TV.

Beijing Poly-bona Film Publishing Co, which finished its second-round of financing in June by raising 100 million yuan ($14.64 million), said it intends to go public in the US in 2011.

Huayi Brothers, China's leading privately owned media company, is also exploring listing options, according to its deputy president Hu Ming.

"Distributors usually have capital constraints for investing in blockbusters. This can be mitigated once the media groups go public. The to-be launched growth enterprise board will also open up more avenues for raising capital," said Leng Xingxing, analyst, China Jianyin Investment Securities.

CFGC posted a net profit of 56 million yuan in 2006 while its operating cash flow in the same period was 201 million yuan. That was just half the amount needed to make the historic epic "Red Cliff" or "Forever Enthralled".

"It's lucky that the movie 'Assembly' could get 50 million yuan loan from China Merchants Bank. Normally banks are not too keen to fund movies and as a result distributors often have to search for funding partners elsewhere," Leng said.

During the first half of the year, the country's box-office receipts amounted to 2.5 billion yuan. Industry insiders said China's booming movie industry has now begun to enter the so-called "golden decade".

"Movie ticket sales in the country could reach 35 billion yuan in 10 years while revenue may cross 100 billion yuan," CFGC Chairman Han Sanping said at the Shanghai International Film Festival in June.

(China Daily September 2, 2009)