China's movie box office income is expected to see an average annual increase of 9 percent by 2021, a Nomura report showed.
The country's movie box office revenue could hit 78 billion yuan (11.5 billion U.S. dollars) in 2021, according to the Nomura report.
"Improving content quality and ongoing theater expansions are the key growth drivers, with the former improving viewership and the latter broadening the addressable movie market," said the report.
The growth of online video platforms could negatively impact the movie sector, similar to what Nomura noted in North America, according to the report.
Movie admissions in North America have been declining partly due to the expansion of online video platforms such as Netflix.
However, Nomura said it believes China's movie sector is likely to fare much better as there is still room to penetrate the market.
China's movie box office revenue rose 9 percent in 2018 to 60.98 billion yuan, data from the State Film Administration showed.