China's cinemas look to smaller cities for next phase of growth

Hong Kong-listed China 3D Digital Entertainment's ambitions for the mainland market kicked off this year with the opening of its first cinema across the border, in the coastal city of Xiamen.

"This business really has surprised me," said Chairman Stephen Shiu Jnr. "From the first month, the cinema's cash flow has already broke even."

Gao Jun, formerly a deputy general manager of Beijing-based cinema management company New Film Association, said the rapid growth of box office receipts on the mainland made investing in cinemas a safe option.

He said more than 10 new screens were being added on the mainland every day.

"Cinemas have the flexibility of arranging bestseller movies to have the most screening sessions," he said. "It is a good cash business. Even if you are dissatisfied with the movie you watched, you can't claim your money back."

However, mainland film critic Raymond Zhou said he believed the golden age of cinema investment on the mainland was over.

"The best time was three to five years ago, when the market was just picking up," he said. "Now it has become quite crowded, especially in first-tier cities."