Imax sells 20% of its China business

"The stake involvement would make them more active in developing expansion opportunities in the market."

China Giant Screen, a Chinese version of the big movie screen product, co-developed by State-owned China Film Group Corp and GDC Technology Ltd, a Hong Kong-

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headquartered digital cinema equipment maker backed by the Carlyle Group, has become a major rival of IMAX in China, with a comparatively low ticket price and a rapid pace of expansion.

It officially entered the business in April 2012.

Moreover, Poly Film Investment Co Ltd, a wholly owned subsidiary of the State-owned China Poly Group Corp, formally introduced its internally developed giant-screen projection system known as PolyMax in June last year.

Both China Giant Screen and PolyMax systems have cost advantages over IMAX.

"Under the circumstance of the increasing competition from domestic rivals, Imax Corp might need to think about the issue of lowering the cost of its giant screen products and related projection system in the future," said Chen.

Imax Corp generated $56.5 million in China last year, up 26 percent year-on-year, while the North America market witnessed a 6.5 percent decline from a year earlier to $136.2 million.

Imax Corp yielded $287.9 million in global revenue in 2013, increasing 1.8 percent compared with the previous year, according to its financial report.

"I think in the next three years, the growth potential for giant movie screens in China will maintain strong momentum," said Chen.