Earnings Report /
Thailand

Major Cineplex Group PCL: Net loss in line with estimate

  • Net loss was in line with our expectation

  • MAJOR reported a Bt475m net loss for 2Q20

  • Apart from the loss from the disposal of an investment

Napon Jaisan
Napon Jaisan

Equity Research Analyst

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Bualuang Securities
11 August 2020

Although there are recovery signs following the lifting of the lockdown and more blockbusters are slated to screen, we doubt whether audience confidence will be fully restored in the near future. Moreover, second waves of COVID-19 are hitting the US and Europe, which will affect screening schedules for Thailand.

AMC Theatres and Comcast Corp's Universal Pictures agreed to a major shift that will allow the studio's movies to be made available to US audiences at home after just three weekends in cinemas. Moreover, Disney decided to release Mulan online, due to COVID-19. We are keeping an eye on their moves, as they might have long-term consequences for the profitability of cinema operators.

Net loss was in line with our expectation

MAJOR reported a Bt475m net loss for 2Q20, a YoY reversal from black ink for 2Q19 and 86% deeper into the red QoQ. Stripping out an extra item—a loss from the disposal of an investment—the core loss would be Bt456m, also a YoY reversal and 77% deeper QoQ. The net loss was in line with our estimate but was 19% deeper than the consensus.

Apart from the loss from the disposal of an investment, there was—almost invariably—an extra gain from a fair value adjustment of investment property of Siam Future Development (SF), given the unusually high “share of profits from investments in associates” item. We don’t yet know the scale of that extra (non-cash) gain.