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IMAX Corporation IMAX is constantly making efforts to expand its presence in the rapidly growing Chinese movie market. In a move aimed at fulfilling this objective, the Canada-based company recently inked a deal with Shanghai Film Corporation and its subsidiary, Shanghai United Circuit Co. Ltd. for five more IMAX theaters in the country.
IMAX stated in its press release that the current multiplexes in Hangzhou, Qingdao, Shenzhen and Chengdu will house four of the theaters involved in the new deal. The other one will be added to a new development in Changzhou.
We note that IMAX and Shanghai Film Corporation, which is China’s largest state-owned enterprise in the exhibition industry, are no strangers to each other. The entities have inked deals for twenty six theaters over the past year. The count has further increased following the new deal.
According to the press release Shanghai Film Corporation, a holding subsidiary of Shanghai Film Group Corporation, has emerged as IMAX‘s third-largest partner in China and fifth-largest partner across the globe. In fact, IMAX’s growth in China has benefited from its associations with Chinese media companies.
By the end of 2021, IMAX plans to set up nearly 219 giant screens in the country. The company intends to install a digital re-mastering facility in China to convert Chinese language movies to the IMAX format. Previously, IMAX had struck a deal with Bona Film Group Ltd. BONA to launch three additional IMAX theaters in the country.
The tremendous commercial potential offered by the Chinese movie market is highlighted by China’s box-office revenues that surged approximately 36% year over year to $4.77 billion in 2014. Riding on the growth potential, the Chinese division of IMAX generated profits of $22.6 million in 2014, up 29%. IMAX intends to make the Chinese market its largest, going forward. The promising prospects of the Chinese movie market have prompted several analysts to believe that it will surpass the U.S. movie market by 2019/2020.
IMAX currently carries a Zacks Rank #3 (Hold). Better-ranked stocks include Entercom Communications Corp. ETM and Gray Television Inc. GTN. Both stocks carry a Zacks Rank #2 (Buy).
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IMAX CORP (IMAX): Free Stock Analysis Report
ENTERCOM COMMUN (ETM): Free Stock Analysis Report
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