CE Exclusive
Canadian cinema chain explores new growth in China
Last Updated: 2014-04-23 14:37 | ce.cn/agencies
 Save  Print   E-mail

Montreal-based cinema chain IMAX is planning to sell 20% of its Chinese subsidiary to two Chinese investment firms - China Media Capital and the FountainVest Partners - in the hope that the partnership can help accelerate its development in China, reports Shanghai's China Business News.

The Chinese investors will each pay US$40 million for a 10% stake in IMAX before December 2014. With the US$80 million, IMAX will complete its initial public offering on the mainland within five years.

Citing IMAX CEO Richard Gelfond, the paper noted that the IPO would help increase the number of IMAX screens in China.

China is the company's second largest market following North America. Figures from the IMAX 2013 financial report showed that the company's revenue generated from the Chinese market accounted for 20% of its total last year, while the number of IMAX screens in the country accounted for 21%.

The cinema chain's rapid rise over the past few years took place at a time when new cinemas were mushrooming on the mainland. The number of cinema screens in China has jumped from 4,000 five years ago to the current 18,000.

The total box office revenue from the mainland also surged from 6.2 billion yuan (US$994 million) in 2008 to 21.7 billion yuan (US$3.5 billion) in 2013. The paper attributed the growth to the import of Hollywood blockbusters such as Avatar.

In 2009, Avatar was shown on IMAX screens in China, with audiences experiencing the 3D effect for the first time, the paper said The box office for the science fiction action film shown at 14 IMAX cinemas on the mainland totaled US$25 million, accounting for 11.4% of the total the film grossed in China.

By adjusting its operational strategy, IMAX has more than doubled the number of its cinemas on the mainland from 40 in 2010 to 100 in 2012. An analyst at the Chicago-based investment research firm Morningstar said that the proposed US$80 million deal underestimates IMAX's China asset value. However, he added that China Media Capital, which has investment in Oriental DreamWorks and maintains a strategic partnership with Times Warner, is the best partner IMAX could have in China.

Share to 
Related Articles:
Most Popular
Chinese | BIG5 | Deutsch
About CE.cn | About the Economic Daily | Contact us
Copyright 2003-2020 China Economic Net. All right reserved