CRI听力:China Film Co and Shanghai Film Group Go for IPO

China's two biggest state-owned film companies have submitted their applications in preparations to launch their initial public offerings.

China Film Co and Shanghai Film Group are both planning to be listed on the Shanghai Stock Exchange.
CRI's Alexandra Blucher has more.

As China's film industry is going from strength to strength, two market dominating state-owned film groups are all set to list on the Shanghai Stock Exchange.

Insiders are watching closely to see how the capital raised will be spent and its effect on the industry.

Beijing based China Film Co Ltd is known for releasing the hugely successful film Red Cliff, while Shanghai Film Group is responsible for the Painted Skin film franchise.

Guang Yu is a Research Manager at EntGroup Consulting, a China film consultancy agency, says the companies will invest the funds raised into their weak points:

The money they raise they could invest it into their weak points of their whole industry lay out. For example China Film Group, they have disadvantages in the cinema part and for the Shanghai Film Group they will probably invest more in the production, the distribution.

China Film Co invested in 18 films last year and oversaw the distribution of 134 films in China, including foreign films.
Shanghai Film Group, which doesn't have a license to distribute foreign films, invested in seven films and was involved in distributing 12 films.

And Guang says that these numbers are sure to rise which will affect the market share of China's large private film companies, such as Huayi Brothers Media Group.

They'd like to be more control in the market and gain more market share. We think that with China Film Group and Shanghai Film Group they are going gather more resources and that will be a great influence for Huayi and Bona Brothers but there's not going to be big changes for the whole industry.

But Teng Jimeng, who's a cultural commentator in China and Professor at Beijing Foreign Studies University, says that the industry could see significant changes.

Teng says that an increase in market share by these two large state-owned enterprises could push smaller productions out of the industry altogether.

I predict that small production companies under such circumstances will phase out unless they take quick moves to save their backs, because with more money, with more power, with more man power, and creative power, these state-owned companies will continue to dominate, will continue to hire more talent. For example, great script writers who are capable of telling great stories and upgrading their technologies in terms of making better and blockbuster value films.

The IPO applications are the initial stage of the listing process and a time frame or target fundraising amount have yet to be released.

For CRI, this is Alexandra Blucher.