Photo/VCG

Apr. 22 (NBD) -- China's biggest cinema operator Wanda Film (002739.SZ) said Tuesday it plans to raise funds to build new cinemas for a bigger market share, even though it had forecast huge loss in Q1 due to the COVID-19 outbreak.

The film unit of Chinese conglomerate Dalian Wanda Group will raise up to 4.35 billion yuan via private placement of new shares to up to 35 investors. 3.045 billion yuan (around 430 million U.S. dollars) of the proceeds will be used to build 162 new cinemas from 2020 to 2022, in a bid to "further consolidate its market share and leading position". The rest will be used to supplement cash flow and repay loans.

The expansion move came as the whole film industry took a heavy blow in the first quarter of 2020. Wanda Film forecast on April 15 that it will lose 550 million yuan to 650 million yuan in Q1 this year, as the COVID-19 outbreak has forced nationwide shutdown of cinemas for nearly three months, with reopening date still pending.

Another two big players, Jinyi Cinemas and Omnijoi International Cinema, predicted their Q1 losses to be up to 160 million yuan and 105 million yuan, respectively. 

In response to the bleak situation, Wanda Film announced a debt financing scheme last month to raise no more than 2 billion yuan to support daily operation and repay loans. 

Compared with smaller cinema operators, leading companies like Wanda Film are better prepared to weather the difficult times, Western Securities said in a report, which predicted that big players are likely to start acquisitions to increase their market shares.

As of December 31, 2019, Wanda Film operated 603 cinemas with 5,343 big screens in China, ranking the first in the country on key metrics including box office, viewers, and market share for 11 consecutive years.

Email: gaohan@nbd.com.cn