The first animated feature film will be Kung Fu Panda 3 and is scheduled to be released in 2015. Starting in 2017, the studio will release one animated feature film per year. The studio is also partnering with China Film Group and National Film Capital to release a live action film based on the popular book series Tibet Code. The film will feature Chinese actors and be filmed in China. The main character of the book is considered China’s Indiana Jones.
Chinese love the House of Mouse
The Walt Disney Company (NYSE:DIS) is well-known and loved in China. The House of Mouse has its Hong Kong Disneyland and is building a second Disneyland in Shanghai. Disney knows the Chinese market and how to navigate it as well as the other studios.
Disney’s Iron Man 3 just set the opening day box office record in China at $21 million. The Chinese version included four additional minutes of footage that featured product placement for a Chinese milk drink and two new characters played by top Chinese actors Wang Xueqi and Fan Bingbing. Disney and its Marvel Studios partnered with Beijing’s DMG Entertainment as a co-distributor in China. The movie’s gross profits in China are estimated to be over $100 million. Not bad, considering all that was required was an extra four minutes of filming.
How they all stack up
| Viacom | News Corp. | Bona Film | DreamWorks | Disney | |
| Market Cap | $31.95 billion | $74.62 billion | $282.61 million | $1.83 billion | $113.60 billion |
| Revenue | $13.05 billion | $35.47 billion | $141.92 million | $748.41 million | $43.76 billion |
| Qtrly Rev Growth | -0.06 | 0.14 | N/A | -0.01 | 0.10 |
| EBITDA | $3.83 billion | $6.98 billion | $3.78 million | $104.20 million | $11.35 billion |
| Gross Margin | 0.50 | 0.38 | N/A | 0.32 | 0.21 |
| Net Income | $2.12 billion | $5.92 billion | ($3.01 million) | ($39.92 million) | $5.97 billion |
| Operating Margin | 0.28 | 0.16 | N/A | 0.13 | 0.21 |
| P/E | 15.91 | 12.91 | N/A | N/A | 19.11 |
Foolish assessment
All five companies are looking to grab a piece of the burgeoning Chinese market. DreamWorks and Bona Film are two of the smaller players in the space and have the most room to grow. The three big players, Viacom, Inc. (NASDAQ:VIAB), News Corp (NASDAQ:NWSA) and Disney, all have giant operations and are able to leverage their geographic scope and financial strength in China. As China grows, look for all five to see increased profits from China.
Mark Yagalla has no position in any stocks mentioned. The Motley Fool recommends DreamWorks Animation and Walt Disney. The Motley Fool owns shares of Walt Disney.
The article Film Studios Look to China for Growth originally appeared on Fool.com.
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