IMAX Corp. shares gained $1.22 Thursday, a 3-percent gain, on news earlier in the day that the giant screen company had filed an initial public offering in Hong Kong.
The stock had risen nearly 8 percent in pre-market trading to $41.80, just shy of the Canadian chain’s all-time high of $42.50 set in 1997. The driving force was the IPO announcement by its subsidiary IMAX China.
The timing of the filing was likely accelerated by the success of Wanda Cinema’s recent IPO, according to B. Riley analyst Eric Wold. He called the 150-percent increase in potential
IMAX zones in China (from 400 to 1,000) cited in the application “a clear indication of the opportunity still to come in that region.”
Wold has IMAX rated a strong buy and he increased its target stock price from $40 to $50 per share on Thursday. IMAX stock has risen 27 percent in the past 12 months based on its aggressive China strategy and the box office bonanza expected this summer and in 2016.
IMAX has been expanding rapidly in China and currently has 239 screens with 219 in the pipeline. Its leadership recognized the market’s potential early and has capitalized as
China’s box office has exploded, growing 36 percent to $4.8 billion in 2014.
Most analysts believe China will overtake the U.S. box office by either 2019 or 2020, and IMAX has made clear that the region will be its primary market in the near future.