Orange Sky (1132 HK) Turning around in 2016

Transcription

1 Orng Sky (1132 HK) Trning rond in rslts drggd by svrl noncor losss Orng Sky OS rportd nt loss of HK$18m vs HK$1m profit in FY14 which ws nnoncd in its profit wrning rlir. Th rslts incldd HK41m forx loss, HK$14m on loss on film, HK$29m on shr option xpns, HK$4m on impirmnt of loss mking cinms s wll s fir vl loss on proprtis worth HK$m, nd totlld HK$13m. Excld Chin, ovrs mrkts ll rcordd improvmnts with HK EBIT p 3% yoy to HK$3m, SG EBIT p 17% yoy to HK$1m, nd Tiwn EBIT p 81% yoy to HK$38m. Excld noncor losss, OS nt loss ws HK$4m vs or forcst of HK$1m nt profit. Chin oprtion trning rond in 21 Dspit 48% yoy growth in box offic growth in Chin of 21, trnrond in OS Chin s oprtion ws dlyd bcs OS chngd its tickt pricing to stndrdizd pricing ntionwid in 2H2. As indstry comptition ws firc, OS s box offic growth dclind from 2% yoy in 1H1, to 1% yoy in 2H1, nd its ovrll mrkt shr dclind from 2% in 1H1 to 1.2% in 2H1. Sinc lt 21, mngmnt hs swiftly chngd bck to diffrntiting pricing strtgy. As rslt, OS s mrkt shr hs rcovrd bck to 2% lvl in 1Q1 nd mngmnt commntd tht its box offic growth is similr to indstry growth which ws % yoy in 1Q1. OS ddd 4 nw scrns in Chin in FY1, it trgts to dd nothr scrns in Chin, nd most of thm will b from cqisitions with profit grnts. OS sd to lck fnding for xpnsion, bt now is no longr th cs, s OS issd HK$m CBs to CCBI with % intrst pr nnm, xrcis pric of HK$1.. It lso issd 13.79% nw shrs in its Chin oprtion for Rmb4m to thr indstry fnds. On of th fnd is Wiying, which ws invstd by Tncnt nd Wnd, nd oprts Wipio onlin tickting pltform tht hs rond 1% mrkt shr, Wipio cn provid synrgy with OS in trms of tickting sbsidis nd onlin tickt sls. In ddition, OS is considring bying th profitbl cinm dvrtising bsinss from Chirmn, which cold provid synrgy with OS s xisting cinm dvrtising oprtion. Profitbility trnrond will giv OS vltion rrting W bliv OS is ndrpprcitd by mrkt d to prsistnt loss mking in Chin oprtion. W bliv sch concrn is dissipting with trnrond xpctd in 21. As sch, w chng or vltion mthod from sst bsd of book vl to pric to rnings. W ris or rnings forcst by 1%/13% for FY1E/FY17E nd incrs or TP from HK$.97 to HK$1.1 bsd on 21x FY17E PE, which is th globl PE vrg of cinm compnis. Rting By Mintin Trgt pric HKD 1.1 Totl psid Crrnt pric HKD.4 14% 7 April 21 Knnth Li knnth.li@cind.com.hk (82) Trding dt 2Wk Rng (HK$) 3 Mth Avg Dily Vol (m) No of Shrs (m) Mrkt Cp (HK$m) Mjor Shrholdrs (%) Aditors Rslt D Compny dscription.3/ ,43 1,43 W Kbo (.%) KPMG 1H1: Ag In Chin, OSGH oprts 7 cinms with 474 scrns cross Chin. Hong Kong oprtion hs cinms with 24 scrns with 1% mrkt shr. In Tiwn, th compny hs 3.71% stk in Viwshow, which is th lrgst cinm chin with 38% mrkt shr with 13 cinms nd 127 scrns. In Singpor, th compny shrd V with % stk ndr th nm of Goldn Villg, Goldn Villg domints th Singpor cinm mrkt with mrkt shr of % with 11 cinms nd 91 scrns. Pric chrt HK$ r p A y M n l g A p S c t O o v N c D n b F r M (Dcnd) FY13A FY14A FY1A FY1E FY17E Rvn 929 1,83 1,277 1,849 2,318 Oprting profit Nt Profit EPS (HK$) P/E (x) EV/EBITDA (x) P/B (x) Sorcs: Bloombrg, CIRL stimts Pg 1 of

2 Exhibit 1: Nmbr of OSGH movi scrns in Chin Exhibit 2: Chin oprtion historicl EBIT E HK $ 4 2 (2) (4) () (8) () (12) (14) (3) (1) (121) stimts Exhibit 3: Hong Kong sgmnt rvn trnd Exhibit 4: Hong Kong sgmnt EBIT mrgin % 2.% 1.% 1.%.%.%.% 19.7% 12.% 1.% 8.2%.%.4% % Exhibit : Singpor sgmnt rvn trnd Exhibit : Singpor sgmnt EBIT mrgin % 1.% 14.% 12.% 1.% 8.%.% 4.% 2.%.% 14.% 1.4% 11.9% 13.% 12.8% 1.7% 1.1% Pg 2 of

3 Exhibit 7: Tiwn sgmnt rvn trnd Exhibit 8: Tiwn sgmnt EBIT mrgin % 14.% 12.% 1.% 8.%.% 4.% 2.% 8.% 8.4% 13.% 1.% 7.3% 4.% 7.% % Exhibit 9: Prs comprison Bloombrg Mkt Cp PER (x) P/B (x) cod (HKD mn) FY1A FY1E FY17E FY1A FY1E FY17E WANDA CINEMA LA 2739 CH 112, NAN HAI CORP LTD 8 HK 14,3 SMI HOLDINGS 198 HK 1, IMAX CHINA HOLDI 197 HK 1, ORANGE SKY GOLDE 1132 HK 1, C CGV 791 KS 13, MAOR CINEPLEX MAOR TB, CINEPLEX INC CGX CN 18, KINEPOLIS KIN BB 9, CINEMARK HOLDING CNK US 31, REGAL ENTERTAIA RGC US 2, AMC ENTERTAINMEN AMC US 21, IMAX CORP IMAX US 1, CARMIKE CINEMAS CKEC US, Avrg 24, Sorc: Bloombrg, CIRL Pg 3 of

4 Exhibit 1: Finncil sttmnt Incom sttmnt Csh flow Yr to Dc (n) FY13A FY14A FY1A FY1E FY17E Yr to Dc (n) FY13A FY14A FY1A FY1E FY17E Rvn 929 1,83 1,277 1,849 2,318 Prtx profit (18) Gross profit (rportd) ,91 1,38 Txs pid () (4) (1) (44) EBITDA (4) Dprcition Dprcition (18) (137) (1) (19) (21) Associts EBIT 21 (11) (24) CFO bf. WC chng Nt intrst incom (xp.) Chng in working cp (232) (9) (33) 3 (3) Associts () Cshflow from oprtion 4 14 (2) Excptionls/othrs 1 3 () CAPEX (3) (12) (22) (2) (2) Profit bfor tx (18) Fr csh flow (32) (1) (24) Tx xpnss (1) (9) (1) (44) Dividnds Minority intrst () (1) 1 (3) (1) Blnc sht dj Adjstd nt profit 3 1 (4) 9 1 Shrs issd Dividnds Othrs Nt csh flow (4) (124) (274) Blnc sht Nt csh (dbt) strt Yr to Dc (n) FY13A FY14A FY1A FY1E FY17E Nt csh (dbt) t yrnd Csh & qiv Trd rcivbls Rtios Othr rcivbls Yr to Dc (n) FY13A FY14A FY1A FY1E FY17E Invntoris Growth rt (%) Othr crrnt ssts Rvn (41.) Fixd ssts 1,49 1,28 1,2 1,491 1,2 EBITDA (49.1) (1.8) (13.4) (7.4) 3. Intngibl ssts EBIT (83.) (11.7) (12.) Invstmnt, ssocits tc Nt profit 19.2 (88.9) (117.) (149.) 78. Totl ssts 3,19 2,931 2,8 2,947 3,1 Flly diltd EPS 19.3 (89.) (117.) (144.) 78. Mrgins (%) Accont pybls Gross mrgin (rportd) Othr pybls EBITDA (3.) Shorttrm dbt EBIT 2.2 (1.) (19.3) Othr crrnt libs Nt mrgin (14.1) Longtrm dbts Othr rtios Dfrrd tx nd othrs ROE (%)..7 (11.4) Othr longtrm libs (12) (11) (12) (11) (11) ROA (%) 3..4 (.3) 3..1 Totl libilitis 1,44 1,1 1,272 1,29 1,298 Nt gring (%) Intrst covrg (x).4 (.2) (.2) Shr cpitl Rcivbls dys Rsrvs 1,487 1,49 1,3 1,4 1,7 Pybls dys Shrholdrs' qity 1,7 1,79 1,8 1,74 1,844 Invntory dys Minoritis Effctiv tx rt (%) Totl qity 1,7 1,781 1,93 1,87 1,87 Nt csh (dbt) (41) (318) (7) (7) (433) Sorc: Bloombrg, CIRL stimts Pg 4 of

5 Rting Policy Stock Rting Sctor Rting Rting Dfinition By Otprform HSI by 1% Ntrl Btwn % ~ 1% of th HSI Sll Undrprform HSI by % Accmlt Otprform HSI by 1% Ntrl Btwn % ~ 1% of th HSI Rdc Undrprform HSI by % Anlysts List Antony Chng Rsrch Dirctor (82) ntony.chng@cind.com.hk Hymn Chi Snior Rsrch Anlyst (82) hymn.chi@cind.com.hk Knnth Li Snior Rsrch Anlyst (82) knnth.li@cind.com.hk Lwis Png Snior Rsrch Anlyst (82) lwis.png@cind.com.hk ohnny Ym Rsrch Assistnt (82) ohnny.ym@cind.com.hk Anlyst Crtifiction I, Knnth Li hrby crtify tht ll of th viws xprssd in this rport ccrtly rflct my prsonl viws bot th sbjct compny or compnis nd its or thir scritis. I lso crtify tht no prt of my compnstion ws / wr, is / r or will b dirctly or indirctly, rltd to th spcific rcommndtions or viws xprssd in this rport / not. Disclimr This rport hs bn prprd by th Cind Intrntionl Rsrch Limitd. Althogh th informtion nd opinions contind in this rport hv bn compild or rrivd t from sorcs blivd to b rlibl, Cind Intrntionl cnnot nd dos not wrrnt th ccrcy or compltnss of ny sch informtion nd nlysis. Th rport shold not b rgrdd by rcipints s sbstitt for th xrcis of thir own jdgmnt. Rcipints shold ndrstnd nd comprhnd th invstmnt objctivs nd its rltd risks, nd whr ncssry conslt thir own finncil dvisrs prior to ny invstmnt dcision. Th rport my contin som forwrdlooking stimts nd forcsts drivd from th ssmptions of th ftr politicl nd conomic conditions with inhrntly nprdictbl nd mtbl sittion, so ncrtinty my contin. Any opinions xprssd in this rport r sbjct to chng withot notic. Th rport is pblishd solly for informtion prposs, it dos not constitt ny dvrtismnt nd shold not b constrd s n offr to by or sll scritis. Cind Intrntionl will not ccpt ny libility whtsovr for ny dirct or consqntil loss rising from ny s of th mtrils contind in this rport. This docmnt is for th s of intndd rcipints only, th whol or prt of this rport shold not b rprodcd to othrs. Pg of