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Dolby & Wanda Cinema Tie-Up Launches 10th Dolby Cinema

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Dolby Laboratories, Inc. (DLB - Free Report) , in collaboration with its partner, Wanda Cinema Line Corporation, recently announced the opening of the 10th Dolby Cinema at Wanda Cinema Beijing Fengtai Wanda Square.

This expansion is in line with the premium audio, video, and voice technology provider’s intention to reach its target of opening 100 Dolby Cinema screens in China, over a span of two years. Currently, Dolby is focused on the expansion of Dolby Cinema, which has been one of the major profit churners to stoke growth. Year to date, the stock has charted an impressive growth trajectory, returning 36.5%, much better than the Zacks categorized Audio/Video Home Product industry of 13.4%. 

Dolby-Wanda Partnership Grows Strong

The latest site’s first screening will be Wanda’s Legendary Pictures’ “The Great Wall”. In conjunction with Dolby Vision and Dolby Atmos technology, this theatre will definitely offer a thrilling experience for the viewers. While Dolby Vision’s art optics and image processing technology deliver high dynamic range with enhanced color, Dolby Atmos aids in the uniform circulation of sound across the theatre, providing a rich cinema experience.

Dolby Cinema and Wanda Cinema partnered earlier this year, in June, and since the inception, 20 domestic and international movies have been screened in Dolby Vision and Dolby Atmos, for Dolby Cinema. Wanda Cinema, which accounts for 14% of China’s market share in terms of box office revenue, is one of Dolby Cinema’s leading partners assisting it to improve its foothold in China.

Wanda Cinema‘s cross-border expansion plans bode well for Dolby’s growth. Wanda’s subsidiary – AMC – has declared its plans to open 160 Dolby Cinema locations in the U.S., by the end of 2018.

Dolby Cinemas: A Key Catalyst

Presently, there are just over 30 Dolby Cinema locations; however Dolby’s partners are planning to roll out a total of over 220 locations around the world, reflecting tremendous growth prospects. Earlier this year, Jackie Chan Cinema – the top grossing movie site in China – opened its first Dolby Cinema. Going forward, Jackie Chan cinemas plan on opening 10 more Dolby Cinema sites, within the next two years.

Also, the company has a bullish outlook regarding the content pipeline for Dolby Cinema. Majority of studios have released theatrical content optimized for Dolby Cinema. Some of the recent movies include Star Trek Beyond and The Legend of Tarzan. Moreover, The Walt Disney Company (DIS - Free Report) has announced seven new Dolby Cinema titles to be released over the next year.

Ever since the launch of Dolby Cinema in May 2015, over 50 Dolby Vision theatrical titles have been announced or released. The company believes that surging demand for premium viewing experiences will fuel growth for Dolby Cinema over the long haul. Market reports suggest that consumers are increasingly viewing video content on smartphones, tablets and computers. This, in turn, is likely to unlock opportunities for the Zacks Rank #3 (Hold) company.

As analysts have maintained a neutral stance toward the stock, the Zacks Consensus Estimate for fiscal 2017 remained unchanged at 1.89 cents over the past month.

Stocks to Consider

Some better-ranked stocks in the sector include Perry Ellis International, Inc. and Harman International Industries, Incorporated . While Perry Ellis sports a Zacks Rank #1 (Strong Buy), Harman International carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Perry Ellis International operates as a mountain resort and adventure company, which delivers vacation and travel experiences to its customers. The company has registered three solid earnings beats for the trailing four quarters.

Harman International is engaged in developing, manufacturing and marketing audio products and electronic systems. The company has topped estimates thrice in the trailing four quarters, with an average beat of 6.5%.

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