Leading global entertainment technology company, IMAX Corporation IMAX is constantly making efforts to expand its presence in the rapidly growing Japanese movie market.
In a move aimed at fulfilling this objective, this Canada-based company recently inked a deal with Japan's highest-grossing exhibition company, Toho Cinemas Ltd., a subsidiary of Toho Co. Ltd., for ten more IMAX theaters in the country.
Deal Details
Notably, this recent agreement marks IMAX’s largest deal in Japan, expanding its footprint from one to 11 theaters.
The first IMAX theater was opened at Toho Cinemas’ Shinjuku multiplex in downtown Tokyo, this April. Notably, the theater has become Japan's highest grossing one featuring recent flicks like Furious 7, Dragon Ball Z: Resurrection "F", Avengers: Age of Ultron, Mad Max: Fury Road. Moreover, Jurassic World earned a record breaking $1 million, marking IMAX's highest grossing opening weekend in Japan.
Moreover, IMAX and Toho Co. Ltd. recently inked an agreement to release two Japanese films in the IMAX format: Attack on Titan Part One and Attack on Titan Part Two. Notably, the first installment was released on Aug 1 at 19 IMAX theaters in Japan and across Europe and the Asia-Pacific region.
Opportunities in the Market
Since 2009, IMAX has been operating its entertainment business in Japan. With IMAX theaters garnering strong popularity, the region has become a major growth driver for the company.
Notably, Japan currently ranks among the top ten highest-grossing IMAX territories in the world. The country boasts a per-screen average of roughly $1.2 million, thereby emulating leading markets like China. Moreover, Japan‘s film market happens to be the third largest in the world.
Hence, foraying into the Japanese market with its IMAX DMR (Digital Re-mastering) technology, which offers enhanced sound quality, high definition video and customized theatre experience, is likely to fortify the company’s position in the nation.
Bottom Line
The deal with Toho Cinemas should considerably boost IMAX’s expansion efforts in Japan and help it gain from the promising prospects of the country’s movie market.
We note that IMAX raised its theater installation guidance for full-year 2015 and expects to set up 130 new systems in the year. Significant overseas expansion, a strong movie line-up, increasing number of theater installations and higher theater backlog should continue to boost top-line growth.
Zacks Rank & Key Stocks
IMAX currently has a Zacks Rank #3 (Hold). Better-ranked stocks in the sector include Twenty-First Century Fox, Inc. FOX, AMC Networks Inc. AMCX and Sinclair Broadcast Group, Inc. SBGI. All the three stocks sport a Zacks Rank #1 (Strong Buy).
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