• mm2’s 1Q19 net profit gained 13.2% y-o-y as revenue doubled.
• North Asia remains key market; tapping into other regions.
• Enhancing platforms capabilities with foray into virtual reality show and IP ownership.
• Reiterate BUY, Target Price reduced to S$0.62 on lower valuation multiple.

Growth Path on Track

We continue to expect strong earnings CAGR of 25% for FY18-20F, underpinned by growth in production, expansion into the China market, and contribution from UnUsUaL (SGX:1D1).

The stronger cinema arm, with the completion of Cathay cinema acquisition, helps the group build a recurring income base. Having a strong presence in the entire value chain of content creation and distribution further cements mm2's status as the leader in the media/entertainment industry. 

1Q19 results: Growth in revenue from all segments; 1Q19 revenue doubled to S$49m while net profit gained 13.2% y-o-y to S$7.2m.

Source: DBS Research - 15 Aug 2018