Poly Culture Group Corp Ltd, a culture subsidiary of State-owned China Poly Group Corp, is planning to raise up to $331 million in an initial public offering in Hong Kong.

Established in 2000, Poly Culture mainly operates businesses in three sectors — art auctions and management, performance and theater operations, and investments in film and the television industry.

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According to sources familiar with the situation, Poly Culture originally planned to go public on the Shanghai Stock Exchange but abandoned it earlier this year because of regulatory uncertainties on the Chinese mainland.

"Hong Kong is a good option for mainland companies eager for an IPO but who are struggling with the prolonged waiting and uncertainties," said Shao Gang, deputy director of consulting for the culture and entertainment industry at Horizon Research Consultancy Group in Beijing.

Poly Culture generated annual revenues of 1.65 billion yuan ($272 million) in 2012, down 6 percent compared with a year earlier, according to a corporate statement.

The company's net profit declined 30 percent year-on-year to 242 million yuan, the statement said.

In the first 10 months of last year, its revenue increased 17 percent year-on-year to 1.46 billion yuan, while net profit dropped 9 percent on a yearly term to 174 million yuan. The company expects total revenue in 2013 to exceed that of the previous year.

Analysts said it chose to go public not to raise capital to fuel the development of its art auction business but to expand its performance and investment in the cinema, movie and television areas.

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