The cast of Beijing Fun Age Entertainment Co Ltd's second comedy movie meets with the audience at Tongji University in Shanghai after the showing of the movie. [Photo provided to China Daily]

Beijing Fun Age Entertainment Co Ltd, China's first comedy stage play company listed on the New Third Board, is planning to have an initial public offering－as part of its strategy to fund a new round of development and capture bigger audiences.

The company said it has been preparing to list on the Small and Medium Enterprise board in due course, after having achieved increased revenue and profits, according to a filing this week.

Fun Age Entertainment grabbed investors' attention last March, when its valuation topped 5.02 billion yuan ($728 million)－47 times that of two months earlier.

"The company is transiting from performing dramas and stage plays, a relatively niche market, to making movies which reach bigger audiences," said Huang Guofeng, an analyst at Beijing-based internet consultancy Analysys International.

"This offers a positive signal to investors," Huang added. "Another appealing aspect is that the company has solid performers."

However, Huang cautioned investors to remain wary of the high-reward, high-risk business.

He said film and television products were cultural products with strong demand uncertainty, reflecting the lack of predictability about customer demand.

Founded in 2003, Fun Age Entertainment has intellectual property rights to more than 20 quality dramas. It launched on the New Third Board in December 2015.

Analyst said an increasing number of companies listed on the New Third Board are using the over-the-counter market as a steppingstone for capital expansion.

"During the last few months of 2016, riding on the back of the quickening pace of IPOs, many New Third Board companies planned a stock suspension to line up for the A-share board," said Hou Jialin, an analyst with Ai Jian Securities Co Ltd.