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IMAX Inks 10-Theatre Deal with Shanghai Aurora in China

IMAX Corp. IMAX along with IMAX China Holding Inc. and Shanghai Aurora Movie Co., Ltd. has signed an agreement concerning 10 IMAX theater installations in China. Following the agreement, shares of IMAX rallied nearly 5% during yesterday’s trading session, closing at $30.96.

As per the contract, eight IMAX screens will set up under the company's new construction projects throughout China. However, the locations of the remaining two theatres have not been decided yet.

The latest deal is in line with IMAX’s aim to gain more traction in China’s rapidly developing movie market which boasts significant commercial potential.

Lately, IMAX has been garnering significant revenues from the China and intends to make the country its largest market going forward. The market’s tremendous potential has prompted several analysts to believe that it will surpass the U.S. movie market by 2019/2020.

Few days back, IMAX signed a theater agreement with Japan’s leading retailer – AEON Entertainment Co. Ltd. The company also recently tied up with India’s leading theater chain operator – INOX Leisure Limited (INOX) – to add five new screens to the existing INOX multiplexes in the cities of Mumbai, Bangalore, Delhi and Kolkata.

The deal marks IMAX's largest theater agreement in India. The new agreement will help IMAX to bring its tally to 20 screens in the country, with nine available and 11 expected to be launched soon.

Last month, Batman v Superman: Dawn of Justice garnered $36 million from 945 IMAX theaters globally in the opening weekend, making it one of the best films in spite of not having released during the peak seasons.

We expect the success of the movie and IMAX’s expansion goals in the emerging nations to boost revenues.

IMAX currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the related sector are World Wrestling Entertainment Inc. WWE, MSG Networks Inc. MSGN and DreamWorks Animation SKG Inc. DWA. World Wrestling Entertainment sports a Zacks Rank #1 (Strong Buy) while the other two companies carry a Zacks Rank #2 (Buy).

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WORLD WRESTLING (WWE): Free Stock Analysis Report
IMAX CORP (IMAX): Free Stock Analysis Report
DREAMWORKS ANIM (DWA): Free Stock Analysis Report
MSG NETWORKS (MSGN): Free Stock Analysis Report
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