Spackman to be the sleeper hit of financial reporting seasons ahead

Spackman to be the sleeper hit of financial reporting seasons ahead

Michelle Zhu
16/05/17, 12:33 pm

SINGAPORE (May 16): RHB is maintaining its “buy” call on Spackman Entertainment Group with a target price of 27 cents, while noting that the stock is currently trading at a much lower valuation versus local peers and has a positive outlook.

To recap, the group on Monday announced 1Q earnings of $7.6 million, reversing from its net loss position in the same quarter a year ago after recognising earnings from its blockbuster movie, Master, as well as a US$3 million gain from the disposal of its Spackman Media Group (SMG) shares in relation to its latest acquisition.

(See also: Spackman Entertainment out of the red with 1Q earnings of $7.6 mil)


“Going forward, we expect its next movie – Golden Slumber, set to hit the big screens in 2H17 – to boost earnings further… With Spackman’s proven track record, we expect the movie to be profitable and estimate a conservative base-case of 4m ticket admissions, which will likely yield US$2.6 million in earnings for the company,” states analyst Jarick Seet in a Tuesday report.

Golden Slumber is a remake of the 2010 Japanese film of the same name based on an Isaka Kotaro novel, and will star top Korean A-listers such as Kang Dong Won and Han Hyo Joo.

Similar to Master, the film is produced by ZIP Cinemas and will be distributed by CJ Entertainment.

(See also: Spackman commences filming for Golden Slumber)

Further, Seet says that the group’s associate SMG, which aims to be listed on the Hong Kong Exchange in 2018, enjoys added credibility to its value with Spackman’s recent acquisition of Korean equipment rental company, Frame Pictures.

(See also: Spackman Media Group seeks Hongkong listing)

(See also: Spackman to acquire company that leased equipment for ‘The Legend of the Blue Sea’)

He calculates that SMG’s value per share to be between US$4.70 to US$8 under the assumption that the acquisition is priced between 4-6 times FY16 P/E.

On the belief that 2017 is an inflection point for Spackman Entertainment that has seen the group bouncing back to strong profitability this year, Seet thinks there are more M&As in store for the group as Spackman may continue to aggressively pursue strategic acquisitions to develop a more consistent revenue stream.

The proceeds from its recent new share issuance and cash generated from the profit of Master gives it headroom to invest in and produce more movies ahead, he adds. 

As at 12.35pm, shares of Spackman are trading 2% lower at 14.6 cents.

Sentifi - The Edge Markets Singapore - Top themes and market

Sabana REIT aborts acquisition of 72 Eunos Ave 7 property

SINGAPORE (July 21): LHN Group says Sabana REIT would not be proceeding with the acquisition of the property at 72 Eunos Avenue 7. On Dec 8, 2016, Sabana REIT had announced the proposed acquisition of the six-storey leasehold light industrial building for $20 million on condition of obtaining approval from HDB. This was to be accompanied by a 10-year lease back agreement from LHN and a service agreement where LHN will engage Sabana REIT to provide property management and maintenance services for $1,000 a month. But as of Friday, approval of HDB for the proposed sale of the property ha....

SIngtel says credit ratings still strong following Moody’s downgrade to A1

SINGAPORE (July 21): A Singapore Telecommunications (Singtel) spokesperson says its credit ratings “continue to be strong among [its] peers,” after rating agency Moody’s Investors Service on Friday cut Singtel’s senior unsecured ratings to A1, from Aa3. Despite the downgrade, Moody’s says Singtel’s ratings outlook remains stable. The rating cut comes just days after Singtel divested 75.01% of its stake in NetLink NBN Trust through an initial public offering (IPO), raising some $2.3 billion in the process. See: Singtel to divest majority stake in NetLink Trust to under 25% ....

Right timing: STI’s uptrend resumes; mixed bag for blue chips

SINGAPORE (July 21): Here are some charts to look out for this coming week. Straits Times Index (daily) The Straits Times Index (3,314) broke above a three times tested resistance at 3,265 to 3,270 on July 17, indicating a near term target of 3,400. This underscores an earlier break above a reverse head-and-shoulders formation in January which took place at 3,184 indicating a target of 3,500. This target remains valid but could take some time to attain. Quarterly ROC rebounded off its equilibrium line which has been established as a support. ADX has turned up from a low level of 9....