Pegasus Entertainment, the Hong Kong production and distribution company controlled by showbiz personality Raymond Wong Pak-ming, is set to open its first multiplex in mainland China.
Through a 60:40 joint venture with Lander Investment, Pegasus has taken a 15-year lease on a cinema in the VivoCity Mall, being built in Shanghai’s Minxing district. The mall is developed by Singapore’s Mapletree Group and will open in the first quarter of 2016.
Pegasus revealed that it and Lander have together guaranteed performance payments of up to RMB8.3 million (US$1.35 million) to the landlords. The new complex will have at least nine screens, upwards of 1,400 seats and use 4DX motion technology.
Pegasus recently moved into the exhibition sector in Hong Kong, taking over and renovating the Cinema City Langham Place theaters in Kowloon’s busy Mongkok district. Its gross box office for the year to date stands at over US$2.58 million (HK$20 million).
“Cinema City Shanghai not only forms part of our group’s expansion strategy into film exhibition business, but is also a complementary extension of our existing core business of film production,” said Wong in a statement. “We will continue to capture sound business opportunities and strive to establish cinemas in more top-tier cities, so as to further expand our foothold in the PRC.”
Huge numbers of new cinemas are being built across China. According to the State Administration of Press, Publication, Radio, Film and Television, some 1,015 cinema complexes were opened in 2014, delivering 5,397 new screens – an average of 15 new screens per day — and bringing the total number of screens in the country to 23,600. Box office was up by over 30% in 2014.
While cinema exhibition remains an activity in which foreign companies are limited to minority positions, Hong Kong cinema operators can have majority ownership of Chinese theaters, thanks to the Closer Economic Partnership Agreement between Hong Kong and China. Other Hong Kong companies that have made use of CEPA to operate multiplex circuits in China include Broadway (Edko), UA Cinemas/Lark International and Emperor.
Korea’s CJ-CGV also operates in China through CEPA, by virtue of operating a single screen cinema in Hong Kong.