(Yicai Global) March 9 -- Shanghai Film plans to set up a joint venture with its controlling shareholder Shanghai Film Group and Shanghai Jingwen Investment to advance the cinema sector in the Yangtze River Delta region and surrounding areas.

Shanghai Film will hold a 40 percent stake in the new company, it said in a statement yesterday, adding that Shanghai Film Group and Jingwen Investment will each take 30 percent. As Shanghai Film Group holds a 69.22 percent stake in Shanghai Film, the deal will constitute an affiliate transaction.

The venture will invest in and integrate cinemas in the Yangtze River Delta region, home to over 150 million registered residents, and nearby areas through acquisitions, capital increases and other investments in a bid to boost Shanghai Film's influence and competitiveness in the national film industry, the statement said.

Shanghai Film made CNY277 million (USD40 million) profit attributable to the parent firm last year, on revenue of CNY3.2 billion. It claimed to have CNY7.4 billion in assets, unaudited, and CNY5.1 billion in net assets as of Dec. 31.

Both Shanghai Film Group and Jingwen Investment are under the control of the State-owned Assets Supervision and Administration Commission of Shanghai, the biggest city in the Yangtze River Delta region.

Editor: James Boynton