When China’s film industry raises the curtain after the coronavirus, giants will reclaim starring roles, analysts predict
- Wanda Film’s stock has crashed 45 per cent since late January
- Cinemas across China have been dark since late January
The pandemic didn’t play favourites months ago when it dropped the curtain on China’s 64 billion yuan (US$9 billion) film industry. But when the curtain rises again, the industry’s giants will reclaim their starring roles and many bit players will find there’s no longer room for them on the stage, stock analysts predict.
Large cinema chains with ample cash reserve will squeeze out smaller players and enjoy a bigger market share. Producers that can latch onto the rise of online film streaming will benefit. And ticketing platforms with light assets and low debt could also be among the first to recover.
These factors provide reasons for investors to pay attention to this heavily battered sector, analysts say, even though traders should exercise caution as a full recovery may still be months away.
“The short-term impact of the virus outbreak will be over eventually, but in the longer term, it could lead to a reshuffle in the industry and provide new opportunities,” said Liu Yan, analyst at Southwest Securities.
China’s film market – previously estimated to overtake that of the US this year – may be at its darkest moment now. Cinemas across China have been shut since late January, when the government confirmed human transmission of the coronavirus. An attempt by some operators to reopen in March was quickly quashed by Beijing out of fear over a resurgence in new infections, even as factories and restaurants resumed operations gradually.
