China's biggest movie theater operator Wanda Cinema Line Corp is seeking to raise 1.26 billion yuan ($203.26 million) through an initial public offering, scaling back its original listing plan, people with knowledge of the matter said.

The chain controlled by Dalian Wanda Commercial Properties Co. Chairman Wang Jianlin, one of China's richest men, had planned to raise up to 2 billion yuan through the Shenzhen listing, according to a prospectus published last year.

The source said Wanda Cinema has is now seeking about 21 yuan a share - less than originally planned - following guidance from the stock market regulator, the China Securities Regulatory Commission (CSRC), which has been moving to tighten IPO sales.

The theater operator is offering 60 million shares, or around 10.7 percent of the company.

"Wanda Cinema doesn't care how much it will raise in the IPO," said one of the sources. "The key of the listing is to open doors for the company's future development and expansion."

The people declined to be named as they were not authorised to speak to the media. A Dalian Wanda spokesman declined to comment, citing the quiet period ahead of the IPO.

BOC International (China) Ltd is the lead underwriter of the IPO, which starts on Wednesday. Wanda Cinema has said it will use the funds to help open 50 new cinemas.

While China is moving to allow more companies to list on it stock exchanges, the CSRC has since last year tried to control IPO pricing to reign in insider trading. This has dampened prices for many IPOs, and created an extraordinarily bullish secondary market for newly issued shares.

The smaller fundraising would see Wanda Cinema sell its shares at a price-to-earnings (PE) ratio of about 20. A more reasonable valuation would be in the range of 43.8 yuan to 58.4 yuan, Zhang Heng, an analyst at Industrial Securities, said in a research note.

"Under the current pricing system, its shares have significant room to surge on the secondary market," he added.

The IPO fits in with the ambitions of billionaire Wang, already a major shareholder in the second-largest U.S. cinema chain AMC Entertainment Holdings Inc, to control 20 percent of the global box office by 2020.

Wanda Cinema controlled 14.2 percent of China's 29.6 billion yuan movie market in 2014, according to Industrial Securities.