Huayi Brothers Media, one of China’s largest movie groups, forecasts that its full year profitability will be largely unchanged in 2016. That’s despite a dramatic slowdown in the growth of China’s theatrical box office last year.
Reporting unaudited data to the stock market, Huayi said that when it delivers its final figures profit could increase by 5% — or decrease by 15% — compared with its 2015 net income of $120 million (RMB829 million.) The halving of government subsidies and bonus schemes was a significant factor.
The company said that it opened four new multiplexes last year and that in 2017 it will open two location-based attractions. These are Huayi Brothers Film World in Suzhou and Huayi Brothers Movie Town in Changsha.
In recent days, the company confirmed that it paid $11.5 million for a 4.6% stake in Dadi Cinemas, China’s second largest private sector theaters chain. In 2016 Alibaba Pictures Group said that it had bought a similar sized stake, albeit at a higher price. The move by Huayi is intended to increase and improve vertical integration.
Huayi also recently confirmed that it has abandoned its much larger purchase of a 20% stake in mobile games company Hero Entertainment. The deal was announced in September and would have seen Huayi pay $288 million (RMB1.9 billion.)