Chinese search engine giant Baidu is to invest $19 million (HK$50 million) in the SMI Holdings cinema chain.

The deal is part of a wider fund raising exercise by SMI, which is listed in Hong Kong, but operates principally in mainland China. SMI is raising HK$887 through a subscription and a private placing that also puts shares into the hands of Vitel Group and Tianan Property Insurance. SMI said that the new finance will help its cinemas expand from 110 to 160 locations.

The company previously announced a business relationship with Baidu that previously created a SMI-Baidu loyalty card. The company is understood now to want Baidu, which provides more than half of online searches in China, to have a greater role in ticket prices, movie selection, local mapping, and film investment. Baidu will own 1.7% of the company following the deal.

Like other Chinese Internet giants, Baidu is keen to use its strength to build or enhance offline businesses. It is also keen to build up its exposure to film and entertainment, currently one of the hottest investment sectors in China.

Baidu already controls the iQIYI video platform in China and has an investment stake in Huace, the film and TV production group that was behind the “Tiny Times” franchise.