DBS Group Research analysts Ling Lee Keng and Chung Wei Le have initiated “buy” on GHY Culture & Media Holding with a target price of $1.

“For the key TV Program and Film Production segment, we peg it to peers’ average of 16.9 times price-to-earnings (P/E). For the Concert segment, we have benchmarked it to UnUsUaL’s P/E of 20 times based on historical pre-Covid-19 earnings,” write Ling and Chung in an April 15 report.

“Implied P/E for FY2021 and FY2022 based on our target price are 19.4 times and 13.9 times, which is attractive against projected strong FY2020-FY2022 earnings compound annual growth rate (CAGR) of 42%,” they add.

GHY Culture & Media Holding is an entertainment business that focuses on the production and promotion of dramas, films and concerts in Asia-Pacific. It has already produced two well-received dramas, The Little Nyonya and Perfect Village, within its operating history of only two years.

The company launched its initial public offering (IPO) on the Singapore Exchange (SGX) in December 2020.


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In their report, Ling and Chung have highlighted three positives on the counter.

First, the company’s strong network of business relationships with key industry players such as TV networks and video streaming platforms provides avenues for the release of GHY’s strong pipeline of projects.

This, say the analysts, could lead to a projected 40% growth in the company’s FY2021/FY2022 revenue.

Next, the company’s healthy production pipeline should lead to earnings growth of 46% and 39% in FY2021 and FY2022 respectively.

“Content is king. We project eight and nine dramas for FY2021 and FY2022, versus six in FY2020. We expect the unleashing of pent-up demand for superstar, Jay Chou’s concerts once the lockdown is lifted,” say Ling and Chung.


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Lastly, the company has flexible revenue models that is designed to maximise cashflow management and potential upside wherever applicable. The fixed fee model with progressive payment is ideal for the former, while the variable fee model offers more of the latter.

“The group’s end-to-end production capabilities stand out among peers, and provide better control over costs and quality,” they add.

That said, the ongoing Covid-19 pandemic could impact the company negatively, writes the team. The highly competitive nature of the industry that GHY Culture & Media is in, as well as the dependence on its key management team, could pose risks, in the team’s view.

As at 3.36pm, shares in GHY are trading 0.5 cent higher or 0.7% up at 76 cents