Major Cineplex Group
July-August box office takings down 6% YoY
Major Cineplex Group
Investment thesis
The YoY July-August top-10 box office takings decline will be followed by a strong YoY rise in September, due to the low base comparison set by Sept 2012 and a better film line-up. We assume that MAJOR’s 3Q13 ticket sales will rise by 5% YoY and its 3Q13 concession revenue by 15% YoY. Our BUY rating stands, premised on a cheap valuation—an FY14 PER of 11.6x against a 19.2x long-term mean.
YoY dip in July-August top-10 box office takings
Thailand’s top-10 box office takings for July-August 2013 were Bt679m, down 6% YoY. July’s takings were Bt341m, down 10% YoY. August’s takings were Bt338m, down 1% YoY. The decline was due to a weak movie line-up. Only one film grossed near or over Bt100m in July-Aug 2013—Pacific Rim (Bt114m)—against two movies in July-Aug 2012—The Dark Knight Rises (Bt130m) and The Amazing Spiderman (Bt98m in July; Bt138m in total).
Given the low base of Bt232m in top-10 box office takings posted for Sept 2012 and the better movie line-up for the current month—White House Down, Riddick 3 and Elysium—we anticipate a 30% YoY jump in takings for September. Overall, we preliminarily forecast Bt979m in top-10 box office takings for 3Q13, up 3% YoY but down by 38% QoQ. Due to the surprise hit, Pee Mak Prakanong (Bt568m) in 2Q13, box office takings for 3Q13 will almost certainly fall QoQ.
MAJOR’s 3Q13 ticket sales expected to rise 5% YoY
MAJOR’s ticket sales for July-Aug were better than Mojo’s estimates. July ticket sales (excl. concession revenue) were flattish YoY, while August sales rose 14% YoY, led by revenue from Yam Yasothorn 3, which was very popular in the provinces (Mojo doesn’t count upcountry screens). Concession revenues grew by 15% YoY in July and by 22% YoY in August, boosted by sales of mooncakes and movie products. We forecast that 3Q13 ticket sales will rise by 5% YoY and concession by 15% YoY. Onscreen ad revenue is projected to increase 12% YoY in the quarter. We preliminarily forecast a Bt250m net profit, up 28% YoY but down 43% QoQ.
Stronger movie line-up in 4Q13 through FY14
The 4Q13 movie line-up looks much better than the 3Q13 line-up—King Naresuan 5, Tom Yum Kung 2, Thor 2, The Hunger Games 2 and The Hobbit 2. The FY14 blockbuster line-up is solid—Robocop (2014), Captain America 2: the Winter Soldier, Godzilla, Robopocalypse, The Amazing Spider-Man 2, Dawn of the Planet of the Apes, Transformers 4, X-Men: Days of Future Past, Hercules (2014), Resident Evil 6,Hunger Games 3 and The Hobbit 3.
