Market Insight

Wanda plan to open 159 cinemas in the next three years

June 06, 2019

Xin Zhang Xin Zhang Senior Research Analyst, Cinema, IHS Markit
This product is included in:

Want to learn more?
Have an expert contact you.

Wanda Cinemas plans to build 159 cinemas with approximately 1,276 new screens in the next three years (2019-2021), following a plan to raise money through a bond issue. Wanda currently operates around 5,000 screens across mainland China, as well as beginning the drive to consolidation around the world. Wanda Cinemas plans to issue no more than 4 billion yuan (including 4bn) convertible bonds to the market, of which 3.19 billion yuan will used on cinema expansion.

Our analysis

The expansion plan is to further strengthen Wanda’s leadership in the cinema market. It is already the market leader in both box office revenue and screen counts (wholly-owned cinemas). Wanda contributes over 13% of the total box office in China, while in terms of screens Wanda has a market share of 8.3%.

Company announced the plan at a crucial time when the market slowdown in happening. The first five months of 2019 even suffered a loss with cinema admissions down by 13.6% and box office dropping by 5.1% compared to the same period of 2018. The average box office per screen for Wanda also went down from 2.9 million yuan in 2015 to 1.6 million yuan in 2018. The cinema industry also experienced some chaos in the past year from celebrity payment and tax scandals in the entertainment industry to profit loss in key movie studios.

However, on the positive side, it is also a time when the government try to boost and regulate the cinema market with new policies. The government plans to reach 80,000 screens by 2020, which means 10,000 new screens per year in the next two years. It is also encouraging market concentration and starts to open up cinema exhibitor licence to bring strong players into the market.

Wanda has been expanding aggressively with an average of 150 new cinemas per year in the past five years. The plan to have 159 cinemas in three years seems already an adjustment to the current slowdown in the market. It is also in line with the expansion plan of new Wanda Shopping Mall as well, a typical business mode used in Wanda: Wanda Shopping Mall + Wanda Cinema. Wanda has 42 shopping malls in the planning stage in 2019.

 

Geography
China
Research by Market
Media & Advertising
Category
Cinema
Share facebook Twitter Google Plus Linked In Add This Contact Us