Poly Culture Group Corp plans IPO in Hong Kong

"The IPO would bring Poly Culture not only an inflow of huge capital but also a professional platform for capital operations, which is critical for strengthening its current cultural business as well as expanding into other culture-related industries," said Liu Deliang, general manager of New Century Culture Consulting Group, a Beijing-based culture industry consultancy

"In the past years, many cultural enterprises have opted to develop their businesses through mergers and acquisitions, which involves much in the way of financing processes," said Liu.

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"Also, the IPO will improve the company's international profile as an auction house in its bid to challenge the global players such as Christie's and Sotheby's," said Ma Xuedong, executive director of the Art Market Research Center, the first academic institution to conduct research into the fortunes of domestic and overseas art businesses in the country.

"It would take a long time for Poly to develop to the scale of Christie's or Sotheby's, but it will accelerate expanding its footprint outside the Chinese mainland, such as setting up offices in overseas markets," said Ma.

In the China art auction market, domestic auction houses have shown their strength over overseas counterparts.

In 2012, Poly International Auction and China Guardian Auctions, another large Chinese auction house, accounted for 20 percent of the market share in China's art auctions, while Christie's and Sotheby's took 15 percent, according to The European Fine Art Foundation Art Market Report 2013.

China's art auctions witnessed a year-on-year growth of 49.4 percent to 85.65 billion yuan in 2011 but fell 32.8 percent the following year, influenced by the global and national economic slowdown, the first decline since explosive growth started in 2009.

After the plunge in 2012, China's art auction market saw a jump in 2013, growing between 15 percent and 20 percent year-on-year to about 62 billion yuan in transactions, Ma said.

Poly Culture expects art auction transactions in China will maintain growth momentum this year, driven by the rapid increase in the number of rich Chinese, huge inflows of money from institutional investors and the abundant stock of Chinese artworks.

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