MAOYAN Entertainment, China’s top movie ticketing platform that is backed by Internet giant Tencent, launched Friday its initial public offering (IPO) in Hong Kong in which it aims to raise up to US$345 million, a much smaller sum than what it was eyeing last year.

The firm, which is also backed by online food delivery-to-ticketing services provider Meituan Dianping, offers ticketing services through its Maoyan and Gewara apps in China — the world’s second-largest movie market after the United States — and distributes domestic films.

Maoyan Entertainment is selling 132.4 million primary shares in the IPO at a price range of HK$14.8 (US$1.89) and HK$20.40, according to a term sheet.

It could raise up to US$396 million if a greenshoe, or over-allotment option, is exercised within one month from the start of trading.

Loss-making Maoyan Entertainment had earlier been looking to raise between US$500 million and US$1 billion in its IPO, sources said in September, but cut the deal size due to limited investor interest and their sensitivity to valuations, two sources familiar with the matter said.

The company was valued at 20 billion yuan (US$2.95 billion) in November 2017 when it raised 1 billion yuan from Tencent, domestic media reported at the time. However, at the lower end of the price range, Maoyan Entertainment would only be valued at US$2.16 billion, according to another term sheet.

When contacted, Maoyan Entertainment said it continues to work on the Hong Kong IPO as announced in September.

While Hong Kong nabbed the global crown for IPOs in 2018, the performance of deals painted a much grimmer picture, with many companies slumping below their IPO prices.

Other companies had to cut their deal sizes as investors demanded lower valuations, with some opting to go to New York instead.

Maoyan Entertainment secured two cornerstone investors for its IPO — IMAX Hong Kong and Welight Capital — which together committed to buy US$18 million in shares, according to the term sheet.

China’s movie box office revenue rose 9 percent in 2018 to 60.98 billion yuan, clocking a slower pace than the 13.45 percent rise the previous year, domestic media reported. (SD-Agencies)