Major Cineplex Group

Major Cineplex Group Plc

Investment thesis
We expect MAJOR’s 2Q13 ticket sales and earnings to set new records. We still anticipate a sturdy 2H13 movie line-up (though it won’t be quite as strong as the 2Q13 line-up). Our BUY rating stands, premised on a cheap valuation—an FY13 PER of 16.7x against a 20x long-term mean.
Robust 2Q13 box office takings expected
Thailand’s top-10 box office takings for April 2013 were Bt642m, up by 105% YoY, underpinned by the hit Thai movie Pee Mak Prakanong (Bt570m as of May 28; Bt102m in March, Bt426m in April and Bt42m in May). We estimate Bt562m in top-10 box office takings for May, up 35% YoY, led by two Hollywood blockbusters—Iron Man 3 (Bt265m estimate for total) and The Fast and the Furious 6 (Bt250m estimate for total; Bt150m in May). We estimate Bt1.2bn in top-10 box office takings for April-May 2013, up by 65% YoY.
Our forecast of top-10 box office takings for June is Bt500m, up 63% YoY, led by Bt100m in remaining revenue from Fast and Furious 6 and three Hollywood blockbusters—After Earth, World War Z and Superman: Man of Steel. In total, we project Bt1.7bn in top-10 box office receipts for 2Q13, up by 64% YoY and 117% QoQ. In comparison, only two movies grossed over Bt100m each in 2Q12—Avengers (Bt253m in total) and Battleship (Bt148m).
MAJOR should post record ticket sales for 2Q13
We forecast MAJOR’s ticket sales at Bt600m for April, up 120% YoY, and Bt540m for May, up 35% YoY. We now expect Bt1.45bn in 2Q13 ticket sales for the firm, up by 65% YoY and 74% QoQ and a new record (we earlier assumed only Bt1.3bn for the quarter). We preliminarily forecast unprecedented earnings in the range of Bt380-400m for 2Q13, up by 74-83% YoY and 26-33% QoQ.
The solid movie line-up in 2H13 through to FY14
The 2H13 movie line-up, while not quite as spectacular as the 2Q13 line-up, is sturdy—Pacific Rim, R.I.P.D, The Wolverine, Percy Jackson: Sea of Monsters, Elysium, Tom Yum Kung, Thor 2, The Hunger Games 2 and The Hobbit 2. The FY14 movie line-up will include Robocop (2014), 300: Rise of an Empire, Captain America 2: the Winter Soldier, The Amazing Spider-Man 2, Dawn of the Planet of the Apes, Transformers 4, The Fast and the Furious 7, X-Men: Days of Future Past, Hercules (2014), Avengers 2, Hunger Games 3, The Hobbit 3 and Night of the Museum 3.