SINGAPORE (Dec 21): DBS Vickers Securities is maintaining its “buy” call on mm2 Asia, the films and TV production house, with a target price of 56 cents.
This comes after the successful listing of UnUsUal as well as after mm2 reported a net profit of S$8.9 million for 1H17, nearly double from the previous year.
Looking ahead, DBS analyst Ling Lee Keng anticipates the group’s increasing focus on North Asia, and expects the region to contribute over 70% of core revenue from FY17F, up from 23% in FY16.”
“The successful listing of UnUsUal, which mm2 acquired at 10.2x PE back in February 2016, would enable mm2 to crystallise gains and unlock value,” Ling adds.
mm2 in November proposed the acquisition of 13 cinemas in Malaysia, which will increase its total number of owned cinema screens in the country to 133.
Aside from building a source of recurring income, Ling believes the acquisition will enable mm2 to “scale up for better synergies and cost savings”, as well as propel the group to become a top four player in Malaysia from FY18F onwards.
“mm2 will continue to expand in the area of new media content. With an Over-thetop (OTT) content platform in development and the recent proposed acquisition of RINGS.TV to offer more diverse content and an additional platform for broadcast, mm2 is in a position to produce, distribute and exhibit transmedia content and enter new market segments,” asserts the analyst.
Shares of mm2 are trading at 42 cents.