IMAX and TOHO Cinemas expand partnership in Japan

TOKYO - IMAX Corporation (NYSE: IMAX), a $1.31 billion market cap entertainment technology leader, and TOHO Cinemas Ltd. have announced an expansion of their partnership with plans to open six new IMAX with Laser systems across Japan. The new locations will include two theaters in Tokyo and one each in Utsunomiya, Nisshin, Toyama, and Motosu. The Tokyo and Utsunomiya sites are expected to open by the end of 2025, with the Toyama and Motosu locations following in the first half of 2026. According to InvestingPro data, IMAX has demonstrated strong market performance with a 51% return over the past year, suggesting investor confidence in its expansion strategy.

This agreement also includes an upgrade to an existing theater at TOHO Cinemas Hibiya, making it the first site outside of North America to feature two IMAX systems within the same complex. This move brings the total number of IMAX locations operated by TOHO Cinemas in Japan to nine, with seven additional systems slated to open by the end of 2026. IMAX maintains a healthy financial position with a current ratio of 3.92, indicating strong ability to fund its expansion plans. InvestingPro analysis reveals 11 additional key insights about IMAX's financial health and growth potential, available to subscribers.

In 2024, TOHO Cinemas hosted three of the top four highest-grossing IMAX theaters in Japan. The two companies also share a strong film partnership, highlighted by the upcoming release of the sequel to the record-breaking Demon Slayer, which is anticipated to premiere in July this year, following a re-release of the original movie in May.

The new IMAX theaters will be equipped with the latest IMAX with Laser technology, known for its sharp 4k laser projection system, enhanced color range, and immersive audio-visual experience. This announcement comes as IMAX has signed agreements for eleven new and upgraded locations in Japan this year, potentially surpassing the record of twelve set in 2023. Currently, IMAX operates 53 locations in Japan, with 17 more in the pipeline.

TOHO Co., Ltd. (TYO: 9602), the parent company of TOHO Cinemas, has been a significant contributor to IMAX's success in Japanese-language films, producing or distributing many of IMAX's top-grossing titles in the region. Last month, TOHO's Gkids' re-release of Princess Mononoke in North America marked the biggest domestic opening for a local language title in IMAX, grossing $4.1 million.

IMAX Corporation, headquartered in New York, Toronto, and Los Angeles, is a leader in entertainment technology, providing a network that is a key distribution platform for major event films globally. This expansion in Japan reflects IMAX's ongoing commitment to growth and innovation in the cinematic experience.

The information for this article is based on a press release statement. With a robust gross profit margin of 55% and moderate debt levels, IMAX appears well-positioned for its expansion plans. For comprehensive analysis and detailed financial metrics, investors can access the full IMAX Pro Research Report, part of InvestingPro's coverage of over 1,400 US equities.

In other recent news, IMAX Corporation reported its fourth-quarter earnings for 2024, revealing an earnings per share of $0.27 and revenue of $92.7 million, both missing analyst forecasts. Despite this, the company achieved an 8% year-over-year growth in Q4 revenue and a 21% improvement in operating cash flows. Looking forward, IMAX anticipates a strong 2025, driven by a robust slate of films and market expansion. In a strategic move, Kinepolis Group, in partnership with IMAX, announced the addition of nine new IMAX locations across Europe and North America, expanding their global footprint significantly.

Analyst firms have reacted to these developments, with Benchmark maintaining a Buy rating on IMAX, albeit noting concerns over the company's financial outlook for FY 2025. Meanwhile, Rosenblatt Securities raised its price target for IMAX shares to $35, citing a strong start to the first quarter and successful film releases. The firm is optimistic about IMAX's prospects, pointing to a record number of films specifically shot for the IMAX format. This optimism is shared by IMAX CEO Rich Gelfond, who highlighted the high demand for IMAX among studios.

Furthermore, IMAX's partnership with Netflix for exclusive releases, such as Greta Gerwig's "Narnia," marks a significant step in leveraging its platform for unique cinematic experiences. This move, along with ongoing product launches, is seen as a pathway for growth by analysts. These recent developments underscore IMAX's strategic initiatives to strengthen its position in the entertainment technology industry.

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