SHANGHAI, Jan. 23 (Xinhua) -- China's movie box office revenue is estimated to grow at an average annual rate of 12 percent between 2017 and 2020, boosted mainly by increases in the number of movie screens, UBS Securities said Tuesday.

The film market posted a better-than-expected performance in 2017, it said in a research note.

But movie screens in small cities have fewer viewers than in big cities, it said, thus lowering the predicted box office from each screen by two to five percent between 2018 and 2020.

Domestic films have won more recognition. Sixty-eight percent of survey respondents said they liked domestic films in 2017, eight percentage points higher than a year ago, it said.

On the contrary, 71 percent said they liked Hollywood movies, six percentage points lower than a year ago.

In the third- and fourth-tier cities, more moviegoers favored domestic films over Hollywood.

China's film industry has a big potential in terms of online distribution and the leading film distributors can expand their market shares through mergers, it said.

China's movie box office revenue rose 13.4 percent in 2017 to 56 billion yuan (8.7 billion U.S. dollars), with domestic films contributing 53.8 percent to the market, according to the State Administration of Press, Publication, Radio, Film and Television.