IMAX China Launches $248 Million IPO on Hong Kong Exchange

Shares in the million offering are priced near the bottom of their marketed range in wake of Mainland’s financial turmoil

Last Updated: October 7, 2015 @ 8:01 PM

IMAX China launched a $248 million initial public stock offering on the Hong Kong Exchange, as the Canadian giant screen company made its biggest bet yet on the booming Chinese movie business.

IMAX invested early and often in China and has capitalized as its movie industry has boomed. Box office revenue jumped 34 percent to $4.8 billion in 2014, according to the Motion Picture Assn. of America. This year, it rose nearly 50 percent to $3.3 billion in the first six months and the world’s second-largest movie market is expected to overtake that of the U.S. in 2017.

IMAX has benefited from key partnerships with Chinese media companies, including Wanda Cinemas, and a theater-building spree in the world’s most populous country. IMAX has 239 screens in China with another 219 planned.

Demand for new listings in China has been hurt by a steep slide in Chinese stock markets earlier in the year, as well as increased volatility in other global equity markets — and the IMAX IPO appears to have been affected.

The IPO was priced near the bottom of its marketed range at HK$31 per share according to a filing in Hong Kong last week, and demand from retail investors accounted for only 70 percent of the shares on offer for that portion of the deal.

By comparison, a similar-sized listing by Yunnan Water Investment in May saw demand worth more than 354 times the number of retail shares offered and an April listing by Shanghai Haohai Biological Technology Co. was oversubscribed nearly 180 times.