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China’s Golden Harvest and SMI Exhibit Confidence in Current Box Office Boom

SMI Holdings, the Hong Kong-listed mainland China cinema chain, said that its box office revenues in the first half of the year surged by 72%. The figure is considerably higher than the 49% increase reported nationwide for the first six months of 2015.

SMI said that the gross increase was based on a 67% increase in ticket sales, which implies that it also managed to push up ticket prices by a fraction. That is also a performance that defies the trend in average ticket prices nationwide, which have been eroded as operators expand their coverage into second-, third- and fourth-tier cities where prices are generally lower than in the biggest metropolises.

SMI’s unaudited data excluded any gain from the 20 new theaters it acquired in June. And it said that it had also managed a 69% increase in food and beverage sales.

(Last week Wanda Cinema Line, China’s largest exhibition chain, revealed its gross box office revenues up 43% at RMB2.85 billion in the first half year.)

Also displaying confidence in current performance was Orange Sky Golden Harvest, another Hong Kong-listed exhibitor, which now has the majority of its business in mainland China. The company’s executive director and majority shareholder Wu Kebo announced that he had bought 31 million of his company’s recently battered shares, lifting him to 67.2% ownership. The shares spiked upwards by 63% to close at HK$0.66 at the end of trading on Thursday.

Such confidence restoring measures had been demanded by the central government of some mainland-listed companies, though were not required of firms across the border in Hong Kong.

China’s stock markets recovered some of their poise on Thursday, as Beijing added further measures to boost liquidity and calm investors. The Chinese Securities Regulatory Authority banned shareholders with over 5% stakes from selling stock in the next six months. It also promised to hit back at “malicious short selling.” The main Shanghai index climbed by 5.8% Thursday and the Shenzhen market was up 4.3%. But still more companies suspended their shares from trading.

The Hong Kong market, sucked Wednesday into China’s downward spiral, also recovered ground on Thursday. The benchmark Hang Seng Index rose by 3.7% to close at 24,392.

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