Wanda Cinema Line, China’s top-grossing cinema circuit, is poised to float in China’s stock market.

The company has just passed the Environmental Protection Assessment for IPO, assessed by Beijing City Government’s Beijing Municipal Environmental Protection Bureau.

The Environmental Protection Assessment for IPO is a necessary procedure for a company to qualify for an initial public offering. With this hurdle passed, analysts now expect the company to file for its IPO in either Shanghai or Shenzhen stock exchange within the next few weeks. If floated, Wanda Cinema Line, the largest privately owned cinema circuit, will become the first cinema management business in China to become a public company.

Established in 2006, Wanda was the joint venture partner of Warner Brothers International Cinemas in China before WBIC withdrew from China in 2006. After that, the company took over management of some of WBIC cinemas and began to rapidly expand its cinema business. In 2009, Wanda became the highest-grossing cinema circuit and in 2010, it remained the top-ranking cinema circuit, with annual revenue of $211.88m, owning 72 cinemas and 600 screens up to the end of 2010.

According to Zhang Yabo, an analyst from Shanghai-based Orient Securities, the reason behind Wanda Cinema Line’s fast growth is the rent and location support of Wanda’s parent company, commercial property conglomerate Dalian Wanda Group. “This gives Wanda a privileged position that is difficult to duplicate or surpassed by its competitors,” Zhang said.

In China, cinema operators get to take 50%of a film’s box-office takings, while cinema circuit managers take another 7%. Such a revenue-sharing scheme also makes exhibition the most profitable sector in the Chinese film industry, according to a Shanghai-based stock analyst. This explains that even major production and distribution studios such as Huayi Brothers and Bona Film Group began to develop or expand exhibition activities, the analyst said.

As Wanda plans to operate 120 cinemas by the end of 2012, analysts predict that the company will expand into the eighth-largest cinema circuit in the world by 2012.

It is understood that Wanda Cinema Line has also established film production and distribution wings, in order to vertically integrate the company’s film businesses.