Will Time Warner Inc (TWX) Stock Fly As Superman Invades China?

Is there a superhero more quintessentially American than Superman? The hero that came to stand for “truth, justice, and the American way”? Probably not, yet Chinese filmgoers love him anyway.

Henry Cavill plays an American icon in Man of Steel. Sources: IGN and Warner Bros.

Man of Steel, a retelling of the character’s origin but with a darker twist, claimed nearly 80% of box office receipts, or $5.86 million, on its opening day in China. The film entered this weekend having already topped $35 million in ticket sales, according to data cited by The Hollywood Reporter.

Worldwide, Box Office Mojo pegs Man of Steel‘s haul at $422.1 million through Friday, with $188 million of that from overseas territories.

For  stock investors, a big reception around the globe increases the odds that Man of Steel can be for DC what 2008′s Iron Man was for Marvel: a stepping stone to a wider franchise. That Chinese moviegoers are already interested is a welcome sign.

Yet DC has a long way to go if it’s to catch Marvel and studio parent The Walt Disney Company (NYSE:DIS). Iron Man 3 set a new single-day record during its Chinese debut, grossing $21.1 for during its launch.

Still, any progress is worth noting, since Chinese consumers have been slower to embrace DC films. Take The Dark Knight Rises, which grossed $52.8 million in China. Impressive, right? Sure, but U.K. viewers accounted for $90.3 million in ticket sales.

By contrast, Marvel’s The Avengers earned $84.1 million in Chinese theaters, versus $80.4 million in the U.K. China already likes what The Walt Disney Company (NYSE:DIS) and Marvel have to offer, while the censors are still getting to know Time Warner Inc (NYSE:TWX) and DC.

Time Warner Inc (NYSE:TWX)

What 1 billion people can do for Superman and his friends
Man of Steel is a good start. But Time Warner Inc (NYSE:TWX)’s next steps are critical. China’s annual movie market tops more than $2 billion despite efforts to keep a tight lid on features. Regulators allow for only 20 U.S. film imports each year, with another 14 premium screenings of 3-D or IMAX Corporation (USA) (NYSE:IMAX) films.

Studios, meanwhile, get only 25% of the box-office haul from Chinese screenings. Still a big number for a tentpole film — already more than $8 million for Man of Steel, if THR‘s figures are to be believed  – but also a far cry from the 50-50 theater split common to other territories around the world.

Time Warner Inc (NYSE:TWX)’s best bet for maximizing the opportunity may be to bear-hug IMAX Corporation (USA) (NYSE:IMAX), which saw a 58% boost in revenue from showings in Greater China in the first quarter. The company was serving 113 theaters in the region as of March 31 — up from 73 the year prior — with 117 more still to be completed.

We’ve seen it work before. Christopher Nolan used IMAX cameras to great effect in all three of his Batman films, and that franchise resulted in $2.4 billion in worldwide grosses for DC and Time Warner Inc (NYSE:TWX).

Whether or not IMAX Corporation (USA) (NYSE:IMAX) offers the best path to profit, Time Warner Inc (NYSE:TWX) needs a consistent strategy for exploiting China’s appetite for American pop culture. Investors expect nothing less — and rightfully so.

Now it’s your turn to weigh in. Have you seen Man of Steel yet? If so, does the film make you more or less likely to buy Time Warner stock now? Leave your comments in the box below.

The article Will Time Warner Stock Fly As Superman Invades China? originally appeared on Fool.com and is written by Tim Beyers.

Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team and the Motley Fool Supernova Odyssey I mission. He owned shares of Walt Disney and Time Warner at the time of publication. Check out Tim’s Web home and portfolio holdings, or connect with him on Google+Tumblr, or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.The Motley Fool recommends and owns shares of IMAX and Walt Disney.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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