Enlight Media, China's largest non-state media entertainment production company, aims to raise at least 500 million yuan ($73 million) through a mainland initial public offering as early as next year, its founder and president Wang Changtian said on August 21.
"We need the IPO funds to implement our strategies and expand our businesses, such as filmmaking," Wang told Reuters in an interview, adding that the company was now selecting underwriters. "I'm ready for a listing next year, although the timing depends also on market conditions," he said.
The company is now conducting a pre-IPO private share sale to improve its shareholding structure and raise about 100 million yuan. The placement, which involves up to a 15 percent stake of Enlight Media, has attracted interest from domestic private equity funds as well as three China-listed media companies, Wang said.
Enlight Media, which competes with foreign media giants such as Viacom Inc and Rupert Murdoch's Star TV to sell entertainment content in China, is turning to mainland capital markets for fund-raising after its termination in March of a planned acquisition of Hurray! Holding Co Ltd, a China-based music company listed on the US Nasdaq market. Both sides cited a divergence in business strategies.
An IPO in China would enable Enlight Media to fetch higher valuations than in overseas markets, as mainland-listed media companies typically trade at about 50 times their earnings per share, Wang said. He expected the company's sales to reach 500 million yuan in 2008, with a net profit margin of at least 15 percent.
Beijing-based Enlight Media, which Wang founded in 1998, has expanded into a broad range of businesses including filmmaking and entertainment brokering.
TV programme production, once Enlight Media's only business, now accounts for half of the company's revenue. Next year, Enlight Media plans to invest in 15 films, hoping filmmaking could eventually account for 20 percent of its business, up from 10 percent now. Enlight Media recently secured 100 million yuan in loans from Bank of Beijing to support its growth, Wang said.
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