D-Box Technologies has a “significant” opportunity in China, says Industrial Alliance

With a runway of multiple thousands of screens, the opportunity for Quebec-based D-Box Technologies (D-Box Technologies Stock Quote, Chart, News: TSX:DBO) in China is significant, says Industrial Alliance Securities analyst Steve Li.

Last Wednesday, D-Box announced that the mainland China theatre chain Emmy Cinemas would equip two of its theaters located in Yinchuan with D-Box’s motion systems. The sale followed on D-Box first entry into the Chinese market when the Mayflower chain said it would do the same in Zhongshan.

“With nearly 15,000 movie screens in China and the upcoming opening of more than 6,000 others over the next few years, D-Box sees a great future in this country, where the growth rate in the number of theatres is amongst the strongest in the world,” said CEO Claude McMaster.

Li notes that McMaster might actually be underestimating the size of the Chinese theatre market, citing data from China’s State General Administration of Press, Publication, Radio, Film and Television that says there are now more than 18,000 screens, 5,000 of which were added in 2013 alone. The analyst says the companies efforts internationally (it is now in 300 theatres in 23 countries worldwide, including Japan, Malaysia and Russia) are pairing with a recently expanded commitment from Cineplex, the largest exhibitor in Canada, to give him a bullish feeling.

“D-BOX continues to reinforce its brand domestically and internationally,” says Li. “(The company) is well positioned for the increasing adoption of motion technology by worldwide exhibitors.

In a research update to clients Thursday, Li maintained his “Speculative Buy” rating and one-year target of $1.00 on D-Box Technologies, implying a return of 292% at the time of publication.