Alibaba Pictures to buy Chinese cinema-ticketing company as firm expands entertainment arm
Chinese e-commerce giant Alibaba's entertainment subsidiary has acquired one of the mainland's largest suppliers of cinema-ticketing systems, it announced on Tuesday.
Alibaba Pictures Group has agreed to buy Guangdong Yueke Software Engineering Company for 830 million yuan (US$134 million). The firm currently supplies more than 1,000 theatres across China with electronic ticketing systems, as well as facilitating third-party electronic payments using systems such as Alipay.
At its highest point on Wednesday morning, Hong Kong-listed Alibaba Pictures' stock was up more than 14 per cent.
In its filing, Alibaba Pictures said the purchase of Guangdong Yueke would enable it to connect theatres across China with the hundreds of millions of users on its parent company's e-commerce platforms.
The announcement shows Alibaba's commitment to growing its film production and financing arm.
This month, the firm folded its existing online movie ticketing as well as film production financing and investment operations into Alibaba Pictures. Alibaba acquired the firm, then called ChinaVision, in March 2014.
“We believe that integrating these two businesses complements Alibaba Pictures’ existing lines of business and helps realise Alibaba Group’s vision of making digital media entertainment available to our customers anywhere anytime,” a spokesman for parent Alibaba said.
Ricky Lai, a research analyst at Guotai Junan International, said: “We expect that asset injection to be completed this year and further transform Alibaba Pictures into a bigger, one-stop operation for movie production, financing and ticket sales.”
The firm's expansion faltered in August last year, when its new management discovered potential accounting irregularities in the newly acquired company.
Alibaba Pictures posted losses of 417 million yuan in 2014, from a net profit of 178 million yuan the year before.
The company said the loss was mainly due to a significant drop in revenue as a result of delays in distribution of certain television drama series and cancellation and delays of some movie projects last year.
Additional reporting by Bien Perez