Hollywood mini-studio, STX Entertainment is looking at going ahead with its planned IPO in Hong Kong as soon as next month.
Hong Kong finance industry sources Monday echoed a report in the South China Morning Post, quoting John Zhao of investor Hony Capital. A significant STX investor, Zhao pointed to August as a likely date for STX's share sale and finance raising exercise.
STX filed an early draft of its sale prospectus in April with leading financial institutions J.P. Morgan and Goldman Sachs as sponsors of the share issue. There was no requirement at that stage for the company to disclose details of the pricing, how much of its equity would be sold to the public or institutions, or how much new capital it could expect to raise through the share sale.
STX has numerous Greater China financial backers including Hony, Tencent and Hong Kong telco and media operator PCCW.
The Hong Kong stock market is currently a red-hot venue for IPOs. It recently saw the listing of Chinese live streaming company Inke, and the blockbuster sale of smartphone maker Xiaomi. Shares in Xiaomi closed at HK$21 on Friday, up 23% from their debut.
STX's draft prospectus showed revenues in the financial year to end September 2017 reaching $201 million. Losses in the same period were $11.8 million. The subsequent quarter to end December showed revenues climbing 41% to $93 million, with losses of $28.1 million.
The prospectus describes an early stage growth company, that books film and TV project development and production expenses as pure cost in its profit and loss statement. As the company releases more films into the market, revenues will catch up. It says that once running at full speed, STX expects to release 12-15 typical films per year.
STX recently enjoyed crossover success with the Jackie Chan-starring U.S.-China co-production, "The Foreigner." It is also involved in "Killer's Game" with Jason Statham which has financial backing from Tencent, and with Tencent Pictures' "Zombie Brother." Its upcoming sci-fi picture, "Steel Soldiers" has financial investment from Alibaba Pictures.
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