Korean multiplex chain leads booming movie market in Vietnam
In this article (5)
The chain has aggressively expanded in Vietnam since 2011 when it spent $73.6 million to acquire an 80-percent stake in Megastar, one of the biggest local operators at the time.
After the acquisition, CGV maintained an impressive growth rate with revenue hitting VND870 billion in 2012 and VND1.1 trillion in 2013, equivalent to year-on-year increases of 45 percent and 27 percent. The operator also reported substantial growth in net profit, generating on average VND120 billion per year; three times higher than the best achieved by Megastar.
In the next two years, despite steady revenue growth, CGV recorded a significant decline in net profit due mainly to massive investments in new cinemas and foreign exchange fluctuations.
Its 2014 revenue only matched 2013, and net profit tumbled by 40 percent to VND70 billion. In 2015, while revenue soared by 60 percent to VND1.76 trillion, net profit slumped by 55 percent to VND31.5 billion.
CGV has established itself as the leading distributor in the country. It has won exclusive distribution rights to handle movie releases for giant film studios like Universal, Paramount, Disney and Warner Bros, and also topped the distribution rate for local movies.
Questions & Answers
Q.How much profit did CJ-CGV make last year and how does this compare to previous performance?
How much profit did CJ-CGV make last year and how does this compare to previous performance?
Last year, CJ-CGV tripled its net profit to VND93.4 trillion ($4 million). This represents substantial growth, being three times higher than the best profit achieved by Megastar before the acquisition.
Q.Why did CJ-CGV experience a decline in net profit between 2014 and 2015 despite revenue growth?
Why did CJ-CGV experience a decline in net profit between 2014 and 2015 despite revenue growth?
The decline in net profit during 2014 and 2015 was primarily due to massive investments in new cinemas and foreign exchange fluctuations. Net profit tumbled by 40 percent in 2014 and slumped by 55 percent in 2015.
Q.How did CJ-CGV become the dominant cinema chain in Vietnam?
How did CJ-CGV become the dominant cinema chain in Vietnam?
CJ-CGV expanded aggressively since 2011 by acquiring an 80-percent stake in Megastar, one of the largest local operators. This acquisition allowed them to achieve over half of the market share.
Q.What role does CJ-CGV play beyond just operating cinemas in Vietnam?
What role does CJ-CGV play beyond just operating cinemas in Vietnam?
Beyond operating cinemas, CJ-CGV has established itself as the leading film distributor in Vietnam. It holds exclusive distribution rights for major studios like Universal and Disney, and also leads in distributing local movies.
Reader pulse
Is CJ-CGV's aggressive market domination in Vietnam sustainable?
17,157 votes so far