MORE of the Chinese mainland’s film and TV studios are looking to Hong Kong investors to raise money on renewed confidence in a cinema market that’s back on track to overtake the United States as the world’s largest.

Cathay Media Group, known for hit costume dramas and an arts university, filed for an initial public offering (IPO) in Hong Kong last month, in what could be the third major sale this year for a mainland film and TV firm.

The deals are a sign the mainland’s film industry is recovering after celebrity tax evasion scandals prompted a government crackdown on financing.

Movie ticket sales rose 2 percent in September following a 13 percent surge in August — though the industry is still on track for its first annual decline since at least 2011 thanks to big drops in box office revenue earlier this year.

“If Cathay Media proves to be a success, it will drive more similar companies to come to Hong Kong for listing,” said Wilson Chow, industry leader at PwC China’s technology, media and telecommunications (TMT).

A rise in Hong Kong deals would also mark a turnaround after U.S. filmmaker and distributor STX Entertainment, backed by Chinese Internet giant Tencent Holdings Ltd., shelved its initial public offering plan in Hong Kong in October last year.

Maoyan Entertainment, a film distributor and China’s largest online ticketing platform, raised US$250 million in its Hong Kong debut in February this year.

Mainland television drama studio Shanghai Youhug Media Co. is planning an IPO in the city of at least US$100 million, people familiar with the matter said in January.

Cathay Media aims to raise about US$200 million in its Hong Kong IPO, IFR magazine reported last month, citing people close to the deal. Cathay Media declined to comment.

In its IPO prospectus, Cathay Media points out that competition among streaming services is driving demand for films and television shows. Platforms like Baidu Inc.’s iQiyi, Tencent Video and Alibaba Group Holding Ltd.’s Youku Tudou are plowing billions of yuan into new programming to attract and retain users.

“There is definitely momentum here,” said Peter Chan, TMT assurance leader at Ernst & Young in Hong Kong. “Hong Kong’s international capital market is definitely attractive to mainland entertainment companies.” (SD-Agencies)