Top Biz News

Avatar bonanza for animation firms

By Chen Limin (China Daily)
Updated: 2010-01-15 08:08

Chinese viewers watching Avatar movie at an IMAX 3D theater in Beijing. Share prices of Chinese 3D technology-related listed firms surged due to strong investor interest in the sector. [China Daily]

While the blockbuster movie Avatar is a hit in China's theaters, the film's influence has gone beyond the box office to affect the stock prices of national firms involved in creating similar hi-tech animation.

Shenzhen-listed Guangdong Alpha Animation and Culture Co Ltd, a leading animation company in China, has seen its stock surge 4.51 percent yesterday after hitting the 10 percent daily trading limit on Jan 13.

"Investors see huge potential for animation companies in China and are paying more attention to related industries," said Li Bin, an analyst at Guolian Securities.

Alpha Animation is going to put out a new animated movie on Jan 23, and the company expects to further benefit from the animation craze Avatar has created.

As of Jan 11, Avatar has pulled in 309 million yuan nationwide, making it the first film in the country to reach the figure within eight days.

Based on a well-received fictional cartoon series adaptation, Alpha's movie aims to attract audiences with a blend of 3D technology and real actors.

China's plan to combine Internet, telecom and TV networks by 2015 may offer future growth opportunities in the development of the animation industry.

"Animation work is now mainly broadcast on TV, but after the Internet, telecommunications and television networks are integrated, the work will appear on many more platforms, such as mobile phones and the Internet, and therefore future demand will be huge," said Li Bin.

Some other Chinese companies with ties to the 3D industry have also made a strong showing in the markets recently.

Electronics companies Silan Microelectronics, listed in Shanghai, and Shenzhen-listed Deren Electronic saw their stocks rise by 3.85 and 4.41 percent yesterday respectively.

Due to the Avatar craze, 3D screens have become a market darling. China now boasts over 700 3D screens, 11 of which are IMAX 3D.

According to IMAX Corporation, a maker of big-screen projection systems, cinemas with IMAX 3D screens will grow nationwide to between 25 and 50 in the near future.

However, analysts say focusing on the popular 3D trend without considering a company's overall prospects may prove dangerous for investors of a company.

"3D display technology is more of a concept now," said Li Hao, an analyst at South China Securities.

"It'll take about five more years for the industry to develop and enter a sophisticated phase," he added.