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This counter is probably another goreng kaki where mata closed both eyes and sleep again...
Let's wait and see...
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The company is in movie/content production biz, which isn't a biz model with stable cash flow. The PE is close to 30, and IPOed recently around end 2014.
I am with GG. The selling point is on low PEG, with only very minimum track record? The expected growth must be more than 30% annually.
I don't see any merit, based on value investing perspective. Any one to enlighten me?
(not vested, and only spend minimum time on it)
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"To broaden its revenue stream, mm2 has recently acquired five cinemas in Malaysia. The ownership of cinemas will provide a source of recurring income to the group and cost savings in the longer term. We value the company at 18x on FY Mar17 EPS, a 30% discount to peers, given its much smaller size. Based on this, we arrive at a fair value of $0.84. The stock is currently trading 14x FY17PE."
How come your PE is different from DBS one?
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18-10-2015, 02:44 PM
(This post was last modified: 18-10-2015, 02:49 PM by CY09.
Edit Reason: Edits for emphasis
)
The beauty of the analyst report was "The stock is currently trading 14x FY17PE". Analyst are predicting that the EPS of mm2 Asia in 2 years time (FY17) will be 4.96 cents. Current EPS for FY 15 is 2.5 cents, hence UOB is projecting that earnings will double in 2 years. How realistic is UOB's projection? I say it is very unrealistic.
This year was a bumper year because of "ah boys to Men 3". Unfortunately, it was not a great show and I dare say the reason for it being the highest grossing was because a certain army organisation spent its "Cohesion budget" to encourage employees to watch it during the 3 weeks it was screened. Unless mm2 asia continues to produce defence related movies each year and in turn "enjoy the wastage of "cohesion budget"", I predict income will remain flat for FY 16 (probably for FY 17 as well)
The success of mm2 will be on the films it produces. As of now, I do not think we will see any wonderful production from Singapore studios
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(18-10-2015, 11:20 AM)traderly Wrote: "To broaden its revenue stream, mm2 has recently acquired five cinemas in Malaysia. The ownership of cinemas will provide a source of recurring income to the group and cost savings in the longer term. We value the company at 18x on FY Mar17 EPS, a 30% discount to peers, given its much smaller size. Based on this, we arrive at a fair value of $0.84. The stock is currently trading 14x FY17PE."
How come your PE is different from DBS one?
I reckon CY09 has already given you the illustration of the differences. Both are valid, but from different perspective.
IMO, there is nothing wrong, for forward valuation, as we all bet for the company future, rather than the past. We need to differentiate historical valuation, and forward valuation, which carry different uncertainties (risk). A forward FY17PE of 14x, with current FY15PE of about 30x, means the next 2 years annual growth forecasted are about 40%, which is a very high expectation.
(sharing a view, on top of the good post from CY09)
“夏则资皮，冬则资纱，旱则资船，水则资车” - 范蠡
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ic. thanks for sharing. will assess further.
Read that the revenue streams are not just box though, so need to search comparables..
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