Brokers' take

mm2 Asia | Add Target price: S$0.72 June 5 close: S$0.48 CGS-CIMB, June 4

mm2 posted S$192 million revenue (+101 per cent) in FY18, driven by broad-based growth across all its four segments. This offsets higher admin costs and results in higher core net profit of S$26.4 million (+39 per cent year-on-year). We deem FY18 core net profit to be in line, though 4 per cent above our FY18 forecast, as Q4 is a seasonally stronger quarter, forming 35 per cent of our and consensus full-year numbers.

mm2's core production business recorded 65 per cent topline growth in FY18, of which North Asia now accounts for 57 per cent of total production revenue, versus 46 per cent in FY17. Its recent three-year financing partnership with CJ E&M also underscores mm2's capability and expanding network in the South-east Asian film market. Meanwhile, we expect full-year contribution from its Cathay acquisition, better box office performance and improving cost synergies to drive FY19 growth for cinema operations.