The company is the movies arm of Chinese e-commerce giant Alibaba and has its own share listings in Hong Kong and Singapore.
“APG has set up a team in charge of this (cinema) business and the team is already operational,” an Alibaba Pictures spokesman told Variety by email.
Local media reports have pointed to a construction project in the giant inland city of Chongqing as one of APG’s first sites.
In May this year APG agreed to invest $154 million in the convertible bonds of Dadi Cinema Construction, one of China’s top three circuits. But aside from the Dadi investment, APG is currently more focused as a technology-driven film financier, distributor and marketing player.
The downstream move into exhibition comes at a time when box office growth in China has suddenly slowed and cinemas suffered three successive months of lower sales. But this and other huge bets such as Wanda Cinema Line’s recent commitment to buy 150 additional IMAX screens, suggest that Chinese companies are confident that the theatrical business will recover its poise.
Many more cinemas are coming on stream. At the end of 2015 China had 31,600 cinema screens in operation. By the end of this year the total is expected to be close to 40,000, putting it roughly on a par with the North American screen count – albeit with a population more than four times as large.
At the time of the Dadi deal APG CEO Zhang Qiang said: “Cinemas will play an integral part in Alibaba Pictures’ operations, as the company aims to build an integrated entertainment platform for the film industry. It will not only serve as an important consumption context within the entertainment industry, but also become a core application of internet in the film industry.”
Last month APG said that it was setting up a $300 million (RMB2 billion) investment fund in partnership with Gopher Asset Management. Some of the capital from the new fund could conceivably flow into APG’s cinema unit. The fund’s purposes were spelled out only vaguely: “The investment fund will invest in companies along the value chain of the movie and TV entertainment industry,” APG said in a filing.
Source: Variety by Patrick Frater