|Charissa Echavez |||Aug 12, 2016 08:38 AM EDT|
(Photo : Getty Images/ VCG/VCG) An investor observes the stock market on his phone at an exchange hall in Huaibei, Anhui Province of China.
Stock prices of China Film Co Ltd. jumped by 44 percent in its first trading on Tuesday following the success of the biggest initial public offering (IPO) made in the Chinese entertainment sector.
With an initial offering price of 8.92 yuan ($1.34), China Film Co., China's biggest movie distributor, opened at 10.7 yuan ($1.61) on Tuesday morning and closed at 12.84 yuan ($1.86), valuing the company at 24 billion yuan (around $3.62 billion), according to China Daily.
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The IPO was announced late last month as China Film Co., which is the distribution arm of state-backed China Film Group Corporation, aims to raise up to 4.09 billion yuan ($611 million) to fund movie production and cinema investments.
The Shanghai-listed stock said it plans to use the capital to fuel its expansion plan over the next three years, including producing 53 movies and 14 TV dramas as well as constructing 91 movie theaters. Following the sale, China Film Group's stake dropped to 67 percent from 93 percent.
China Film's movie distribution business accounts for more than half (58 percent) of the country's market share. In addition, all international films imported in China are handled by either China Film or fellow state-backed Huaxia, according to The Hollywood Reporter.
With China's flourishing film industry, the country is on track to dethrone the United States as the largest movie market as early as next year. In 2015, China Film's profit soared more than three-fourths (76 percent) to 868 million yuan ($129 million).
China's media and entertainment sector is estimated to be worth $180 billion. China Daily reported that the box office receipts soared 21 percent in the first half of the year to 24.6 billion yuan ($3.7 billion), based on the data of research firm EntGroup Inc
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