People sit in cars watching a film at a drive-in cinema amid the COVID-19 pandemic in Manchester, Britain on June 27, 2020. (Photo by Jon Super/Xinhua)

China's film, television and media stocks rallied in the afternoon's trading following news Thursday the cinemas in the low-risk cities in the country could reopen on July 20.

According to China Film Administration, China will gradually reopen cinemas as the country has contained the spread of COVID-19 and cinemas can reopen as early as next Monday in low-risk regions, after having been closed for about 160 days.

Shares of major film companies surged, including China Film Co and Hengdian Entertainment Co. The stock price of Wanda Film Holdings rose 5.99 percent on afternoon opening and ended 1.11 percent higher at closing. 

Relevant shares on the Hong Kong stock market also rose following the news, with shares of IMAX China Holding Inc. increasing more than 6 percent, Media Asia also surged 5.56 percent.

China's basketball league CBA is also mulling over allowing audiences in for remaining season games in Qingdao, East China's Shandong Province, as early as next week, according to Su Qun, CBA commentator.

Most companies in the cultural and entertainment industry will recover from the second half of the year. Internet companies have been making bigger profits during the first half of the year amid the coronavirus outbreak, an industry analyst surnamed Song told Global Times.

However, an insider from one of the largest cinema chains in China, told Global Times on Thursday that the film industry is "nearly dead" this year, with cinemas and film distributors, upstream and downstream of the film industry, suffering huge losses due to the coronavirus crisis. "Television industry is better than movies as it almost breaks even," he added.

Seating capacity is limited to 30 percent for every movie and every session should not be longer than two hours, according to China Film Administration.

More than 200 films have been withdrawn from Spring Festival, Valentine's Day, May Day and Dragon Boat Festival holiday, per a movie industry report released on Friday.

"It is estimated that the film industry has at least 15 billion yuan ($2.14 billion) of receivables and needs 45 billion yuan at the box office to make the film distribution companies make even," a manager of a film-making company told Global Times.

"Under normal conditions, that's about two years' worth of ticket sales. But with limited seating capacity, fewer screenings and consumer fears, the box office will continue to struggle throughout the rest of the year," the manager noted.

According to the industry report, the audience expectation index has risen from 54 percent in February to 88 percent in May, up nearly 90 percent since the closure of cinemas. At the same time, some audiences choose to watch movies online, with more than 60 percent reporting they can accept extra payment for movies on online video platforms, which proves that "cloud watching" has great potential. 

"The development of VR technology will provide a new approach for the entertainment industry, but the technology is not yet mature," the manager added.

A movie about a family drama will be released on July 20, the first film on show after the nationwide cinema reopening, the producers of the film announced. It took nearly two years for the film to be released in China, after the film first appeared at the Tokyo International Film Festival on October 19, 2018.