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IMAX, Wanda Film Fortify Chinese Market Supremacy With New Deal

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IMAX Corporation (IMAX - Free Report) and China's biggest exhibitor, Wanda Film, have struck a far-reaching agreement that cements their longstanding strategic partnership and fortifies IMAX's dominance in the crucial Chinese cinema market.

The multi-pronged deal spans technology upgrades, new theater buildouts, extended venue renewals and potential content collaborations across films, documentaries, music, gaming and sports. At its core, the agreement ensures Wanda will maintain the largest IMAX footprint in China.

Under the terms, Wanda Film will upgrade 61 of its top-performing IMAX locations, including leading venues in Beijing, Shanghai, Guangzhou and Shenzhen, to IMAX's cutting-edge laser projection systems. It will also renew 37 existing IMAX venues for five more years and potentially add 25 new IMAX locations over the next three years.

The deal gives IMAX a renewed commitment from China's preeminent exhibitor at an opportune time, with a robust pipeline of Chinese and Hollywood tentpole releases slated for 2025 and 2026. It reinforces IMAX's position as the premier platform for premium and immersive cinematic experiences in China.

The pact also opens the door for Wanda Film's production arm to collaborate with IMAX on exclusive content beyond films, tapping into growing demand for premium experiences in mediums like documentaries, concerts, esports and live sports.

IMAX has been rapidly upgrading its theater network worldwide to radically higher resolution dual 4K laser projection systems that deliver superior brightness, contrast and color over traditional digital cinemas. The deal ensures Chinese moviegoers continued access to this state-of-the-art IMAX experience, even as Wanda explores new frontiers in immersive entertainment.

With the renewal of their vaunted partnership, IMAX and Wanda are doubling down on their bets for the Chinese theatrical market's robust recovery and continued appetite for best-in-class presentation standards.

IMAX Accelerates Global Theater Expansion With Flurry of Asian Deals

As competition intensifies from streaming platforms, IMAX is aggressively fortifying its global theatrical footprint through a string of new partnerships and venue agreements across key Asian markets. The moves underscore the premium cinema company's efforts to enhance its immersive movie offerings internationally.

In the Philippines, IMAX extended its longstanding alliance with SM Cinema with a deal for 10 new IMAX with Laser projection systems. This includes three brand new locations as well as seven upgrades of existing IMAX venues across SM's circuit to IMAX's cutting-edge laser technology.

Turkey is finally getting its first taste of the IMAX laser experience via a four-theater agreement with exhibitor CineNOVA. State-of-the-art IMAX with Laser systems will be installed in major metropolitan areas like Istanbul and Ankara between 2024 and 2026.

Marking IMAX's largest Indian expansion in half a decade is a three-venue pact with Miraj Cinemas. One new laser auditorium will land in Mumbai in late 2024, with subsequent openings in Jaipur and a third city to follow.

In Thailand, the company is growing its foothold through an expanded partnership with Major Cineplex for three extra IMAX with Laser venues. One is targeted for Bangkok's Bang Kapi district in 2024, plus two more Bangkok openings in 2026 and 2027.

Perhaps most significantly, IMAX and IMAX China, along with Bona Film Group, have announced a deal for three new IMAX with Laser systems in China starting rollout in 2026. It reinforces the surging demand among Chinese audiences for IMAX's premium viewing experience.

These expansion efforts follow a robust 2023 for IMAX that saw the company install 152 new systems across 30 countries. With an even stronger 2024 lineup on the horizon, the company is positioning itself to capitalize on pent-up consumer demand for best-in-class theatrical presentations worldwide.

The Zacks Consensus Estimate for IMAX’s 2024 revenues is pegged at $375.59 million, indicating a year-over-year increase of 0.20%. The consensus estimate for 2024 earnings per share is pegged at 90 cents, unchanged over the past 30 days, suggesting a year-over-year decline of 4.26%.

The raft of international deals enables IMAX to capitalize on theatrical's post-pandemic resurgence worldwide by planting its flag in more high-growth markets. By expanding its laser projection network, it aims to stay ahead of the immersive entertainment curve.

Zacks Rank & Stocks to Consider

Currently, IMAX carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader Consumer Discretionary sector are Gray Television (GTN - Free Report) , Hasbro (HAS - Free Report) and Stride (LRN - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of Gray Television have plunged 46.1% in the year-to-date period. The long-term earnings growth rate for GTN is 10%.

Shares of Hasbro have climbed 18.8% in the year-to-date period. The long-term earnings growth rate for HAS is 25.99%.

Shares of Stride have plunged 17% in the year-to-date period. The long-term earnings growth rate for LRN is 20%.

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