HONG KONG (Reuters) – Maoyan Entertainment, China’s top movie ticketing platform that is backed by internet giant Tencent, launched on Friday its IPO in Hong Kong in which it aims to raise up to $345 million, a much smaller sum than what it was eyeing last year.

The company, which is also backed by online food delivery-to-ticketing services provider Meituan Dianping, offers ticketing services through its Maoyan and Gewara apps in China – the world’s second-largest movie market after the United States – and distributes domestic films.

Maoyan Entertainment is selling 132.4 million primary shares in the initial public offering (IPO) at a price range of HK$14.8 and HK$20.40 ($1.89-$2.60), according to a term sheet seen by Reuters.

It could raise up to $396 million if a greenshoe, or over-allotment option, is exercised within one month from the start of trading.

Loss-making Maoyan Entertainment had earlier been looking to raise between $500 million and $1 billion in its IPO, sources told Reuters in September, but cut the deal size due to limited investor interest and their sensitivity to valuations, two sources familiar with the matter said.

The company was valued at 20 billion yuan ($2.95 billion) in November 2017 when it raised 1 billion yuan from Tencent, Chinese media reported at the time. However, at the lower end of the price range Maoyan Entertainment would only be valued at $2.16 billion, according to another term sheet seen by Reuters.

When contacted, Maoyan Entertainment said it continues to work on the Hong Kong IPO as announced in September.

While Hong Kong nabbed the global crown for IPOs in 2018, the performance of deals painted a much grimmer picture, with many companies slumping below their IPO prices.

Other companies had to cut their deal sizes as investors demanded lower valuations, with some opting to go to New York instead.

Maoyan Entertainment secured two cornerstone investors for its IPO – IMAX Hong Kong and Welight Capital – who together committed to buy $18 million in shares, according to the term sheet.

China’s movie box office revenue rose 9 percent in 2018 to 60.98 billion yuan ($9.0 billion), clocking a slower pace than the 13.45 percent rise the previous year, state media reported.

China, which is on track to eventually overtake the North America film market, has become an increasingly important region for global producers looking to pump up their box office returns, despite a quota on imported films and strict censorship.

Maoyan Entertainment mainly focuses on distributing and promoting Chinese movies though it did help with the distribution of the 2017 romantic drama “The Shape of Water”, which won four Oscars, according to its prospectus.

Maoyan Entertainment’s revenue almost doubled in the first nine months of 2018 to 3.1 billion yuan, the prospectus showed.

The company has yet to turn a net profit though its loss narrowed to 144 million yuan in the same period from 152.1 million yuan in the first three quarters of 2017.

It reported 134.6 million monthly active users in the first nine months of last year.

Bank of America Merrill Lynch and Morgan Stanley are joint sponsors for the listing.

The deal will price on Jan. 24 with shares expected to start trading on Jan. 31, according to the term sheet.

($1 = 7.8447 Hong Kong dollars)

($1 = 6.7768 Chinese yuan renminbi)