Major Cineplex Group
Strong, the force of its revenue is BUY
Major Cineplex Group Plc (MAJOR)
Investment thesis
MAJOR’s earnings outlook remains strong in 4Q15. Three blockbusters in 4Q15—the latest James Bond offering, Spectre; Star Wars: The Force Awakens; and The Hunger Games: Mockingjay, Part 2—along with and GTH’s Thai movie, May Who, sustained high average ticket price (ATP). Furthermore, its screen expansion, with new flagship location at CentralFestival EastVille, another at The Promenade and stronger onscreen ad revenue from Central WestGate as naming-rights sponsor have been further revenue boosters. Our BUY rating stands.
Oct-Nov top-10 box-office soars 32% YoY
Based on Entertain Weekly magazine, the country’s top-10 box-office revenue totaled Bt593m during Oct-Nov 2015, up 32% YoY, on the back of the low Oct-Nov 2014 base comparison. Broken down by month, Oct’s was Bt351m, up 50% YoY, spurred by a string of successful releases, such as The Last Witch Hunter (Bt51m in total), The Martian (Bt59m), May Who (Bt71m) and Arpat (Bt50m). Nov’s was Bt243m, up 13% YoY, with two blockbusters grossing more than Bt50m—Spectre (Bt116m so far; Bt114m in Nov) and Mockingjay 2 (Bt92m so far; Bt80m in total revenue in Nov).
Ticket sales for 4Q15 estimated to show a 4% YoY rise
We expect the Dec 2015 top-10 box-office number to be lower than last year’s, led by the high Dec 2014 base comparison, backed by the hugely successful I Fine Thank You Love You (Bt292m). Overall, we estimate the top-10 takings to reach Bt410m for Dec, down 26% YoY, and Bt1bn for 4Q15, flattish YoY but up 3% QoQ. We project MAJOR’s ticket sales to reach Bt1.18bn for 4Q15, up 4% YoY and 9% QoQ, propelled led by the blockbusters, sustained high ATP and the extra 29 screens. We think the FY16 line-up remains strong, saved by nine superheroes and sequel movies—Batman v Superman, Suicide Squad, Captain America (3): Civil War, X-Men: Apocalypse, Sinister Six, Deadpool, Resident Evil 6, The Divergent Series: Allegiant and ID2.
Star Wars: The Force Awakens expected to launch Bt200m
The Force Awakens is one of the most anticipated movies of the year. We predict that the Thailand box-office take for the film will be Bt200m, which is not unreasonable given that it now holds the record for the largest North American opening weekend take for a film ever, an estimated US$238m. The latest teaser trailer was viewed 70m times so far against 78m times for Jurassic World’s (Bt272m in total). Interest in the seventh Star Wars offering’s trailer appeared also to outweigh the very popular Fast and Furious 7 (Bt382m in total). On top of director J.J. Abrams coming over from Star Trek, the film boasts a cast of new and returning characters; Mark Hamill, Carrie Fisher and Harrison Ford return as Luke Skywalker, Princess Leia and Han Solo. All signs point to The Force Awakens becoming the most popular of the series.
