IMAX to Build Up to 120 New Theaters in China

July 25, 2013

IMAX to Build Up to 120 New Theaters in China

Deal With Dalian Wanda Follows Pact With South Korean Partner

BEIJING—IMAX Corp. IMX.T -0.15% is joining with China’s largest cinema chain to build as many as 120 new theaters in the country, dwarfing a deal that the company announced with a Korean partner last week. The Chinese deal is IMAX’s latest to target Asian consumers’ increasing demand for watching Hollywood blockbusters on bigger, more immersive screens. Under the agreement, IMAX will add between 40 and 120 theaters. At most, it would bring to 381 the number of IMAX theaters open or planned in China, with Wanda Cinema Line Corp. running up to 210 of them.Wanda will build 40 new theaters by 2017 and the rest by 2020, said Wanda General Manager Jerry Ye.

There were 126 IMAX theaters in operation in China at the end of June. Greater China accounted for 15% of IMAX’s first-half revenue.

The Canada-based company said last week that it would add 30 IMAX screens in China and five in South Korea with Korean partner CJ CGV Co. 079160.SE -1.30%

If Wanda builds all 120 theaters, IMAX would generate as much revenue from China as the U.S., said IMAX Chief Executive Richard Gelfond.

“Chinese customers are well advertised for affordable luxuries,” he said. An IMAX ticket at a Wanda Cinema theater can cost as much as 160 yuan, or roughly US$25, while a ticket for a regular-format movie costs about 60 yuan. Mr. Gelfond said he was confident about IMAX’s future in China as the country switches to a consumer-driven economy.

Huang Ting, an analyst with EntGroup, said she expected that the growth of IMAX screens in China would slow in the next few years.

Seventeen IMAX films have been released in China this year, with the next, American action film “Fast & Furious 6,” coming out this week.

Relaxed rules on foreign movies have given a boost to IMAX. Beijing last year allowed the release of 14 additional foreign films in enhanced formats, such as 3-D and IMAX, beyond the previous limit of 20 movies a year.

Wanda, a unit of Chinese conglomerate Dalian Wanda Group Co., runs 119 cinemas with 73 IMAX screens. Wanda was China’s biggest chain in terms of box-office revenue in the first quarter, according to the government. The group, which says it has more than 15% of the Chinese market, is IMAX’s biggest customer.

IMAX didn’t disclose the specifics of its deal with Wanda. Typically, the Canadian company would take about 20% of the gross box office, while its partner would invest about US$500,000 a screen, Mr. Gelfond said.

Dalian Wanda’s AMC Theatres unit plans to install five to 10 new IMAX theaters in the U.S., bringing the country’s total to 152 theaters, IMAX said.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (, the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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