Beijing Gehua Cable TV Network, the only licensed cable TV network operator in Beijing, announced Tuesday it has invested 21.3 million yuan ($3.21 million) for a 1 percent stake in newly established China Film Inc, triggering market speculation that the latter is looking to get listed sometime this year.
China Film Inc, as a subsidiary of China Film Group Corporation, has a registered capital of 1.4 billion yuan ($208.18 million).
All China Film Inc's shareholders are State-owned companies. China Film Group Corporation has 75 percent ownership of China Film Inc, and the remaining shares are held by six companies including Beijing Gehua, China Unicom, and CCTV related companies, each under 5 percent ownership, ifeng.com, a business portal, reported Wednesday.
China Film Group Corporation is China's largest film company with 14 fully funded subsidiaries and one public institution - China Movie Channel Program Center - and holds shares in 34 companies.
For a long time, the market has been expecting China Film Group, as a fully State-owned company under administrative management, to restructure its business and get listed.
To meet the regulatory requirement for listing, the China Film Group Corporation must dilute its full ownership, which is why Beijing Gehua Cable TV received a symbolic 1 percent stake, Zheng Yongshuang, media analyst with Donghai Securities, told the Global Times.
The partnership is expected to benefit both parties, enabling China Film Inc to extend its cable TV programming. In return, Beijing Gehua can also benefit from the lower cost of airing films from China Film Inc, said Yin Hong, a professor at the School of Journalism and Communication at Tsinghua University.
However, Yin told the Global Times that China Film Inc might not include the best assets of its group company. But considering the robust nature of the film making industry in China, China Film Inc is a good prospect for long-term investors.
The benefit for Beijing Gehua may not be that obvious in the short term, Zheng of Donghai Securities said. The company's investment may push up its costs and it will not be able to compensate for the hike by charging higher fees for its digital TV programs due to domestically weak awareness of copyrights and free TV and film programs provided by numerous Internet service providers.
"Beijing Gehua's 1 percent stake is more like a financial investment in China Film Inc," Zheng said, adding that it could cash in after China Film Inc goes public.
China Film Inc, as a subsidiary of China Film Group Corporation, has a registered capital of 1.4 billion yuan ($208.18 million).
All China Film Inc's shareholders are State-owned companies. China Film Group Corporation has 75 percent ownership of China Film Inc, and the remaining shares are held by six companies including Beijing Gehua, China Unicom, and CCTV related companies, each under 5 percent ownership, ifeng.com, a business portal, reported Wednesday.
China Film Group Corporation is China's largest film company with 14 fully funded subsidiaries and one public institution - China Movie Channel Program Center - and holds shares in 34 companies.
For a long time, the market has been expecting China Film Group, as a fully State-owned company under administrative management, to restructure its business and get listed.
To meet the regulatory requirement for listing, the China Film Group Corporation must dilute its full ownership, which is why Beijing Gehua Cable TV received a symbolic 1 percent stake, Zheng Yongshuang, media analyst with Donghai Securities, told the Global Times.
The partnership is expected to benefit both parties, enabling China Film Inc to extend its cable TV programming. In return, Beijing Gehua can also benefit from the lower cost of airing films from China Film Inc, said Yin Hong, a professor at the School of Journalism and Communication at Tsinghua University.
However, Yin told the Global Times that China Film Inc might not include the best assets of its group company. But considering the robust nature of the film making industry in China, China Film Inc is a good prospect for long-term investors.
The benefit for Beijing Gehua may not be that obvious in the short term, Zheng of Donghai Securities said. The company's investment may push up its costs and it will not be able to compensate for the hike by charging higher fees for its digital TV programs due to domestically weak awareness of copyrights and free TV and film programs provided by numerous Internet service providers.
"Beijing Gehua's 1 percent stake is more like a financial investment in China Film Inc," Zheng said, adding that it could cash in after China Film Inc goes public.
