Major Cineplex Group PCL

Ad spend missed targets in 2023. 2024 projections and risks. 2024 projections and risks.

Weakened ad spend in 3Q23. Leaders of the pack in 3Q23—PLANB. Selective buying strategy for 4Q23.

1Q23 OOH ad spend rose YoY but dropped QoQ. Leaders of the pack in 1Q23—PLANB and MAJOR. High season in 2Q23.

Net profit was in line with our expectation. MAJOR reported a Bt76m core profit for 4Q22. The 4Q22 top-line totaled Bt1.9bn.

The dark cloud of Oct-Nov box office is over…. …followed by the new dawn in Dec…. …and to shine through 1Q23.

Core profit was in line with our estimate. MAJOR reported a Bt21m bottom-line for 3Q22. The top-line totaled Bt860m, up 951% YoY and 5% QoQ.

Net profit was better than estimated. MAJOR reported a Bt131m bottom-line for 2Q22. The top-line totaled Bt1.6bn, up by 275% YoY and 45% QoQ.

Total ad expenditure in 2Q22 was Bt25bn, up 9% YoY and 10% QoQ. Seven media categories reported YoY ad spending rises—cinema (up 198% YoY but flattish QoQ), transit (up 53% YoY and 41% QoQ), TV (up 1% YoY and 10% QoQ), radio, newspaper, outdoor (up 16% YoY and 11% QoQ) and in-store (up 37% YoY and 30% QoQ). Total OOH ad spending in 2Q22 rose 30% YoY and 22% QoQ (from the low base set during COVID-19). Eyeball counts for OOH media saw a hike in 2Q22.

Total ad spending in Apr was Bt8.48bn, up 3% YoY but down 3% MoM. Seven media categories reported YoY ad expenditure rises—cinema, transit, TV, radio, newspaper, outdoor and in-store. However, ad dispensers hesitated to increase their budgets amid the economic uncertainty. Eyeball counts for OOH media rebounded in Apr-May. BTSGIF posted ridership on the BTS skytrain of 10.4m trips (or 335k/day) for May, up 31% YoY and 148% MoM. BEM reported mean ridership/day on the MRT of 230k trips in May up 156% YoY and 29% MoM. On expressways, average traffic volume/day jumped 56% YoY and 7% MoM to 1,040k trips.

Net profit was in line with estimate. MAJOR reported a Bt24m bottom-line for 1Q22. The top-line totaled Bt1.1bn, up by 32% YoY but down 28% QoQ.

1Q22—Omicron affected overall ad spending. Leaders of the pack in 1Q22—BEC, MAJOR, and PLANB. 2Q22—high season but….

Total ad spend was Bt8.7bn in Dec, down 9% YoY but up 7% MoM, according to Nielsen. Most media categories posted YoY ad spend falls—transit (down by 41% YoY and 6% MoM), cable/satellite (down by 34% YoY and 16% MoM), magazine (down by 22% YoY, flattish MoM), newspaper (down 32% YoY but up 4% MoM), in-store (down 10% YoY but up 10% MoM), cinema (down 10% YoY but up 50% MoM), TV (down 4% YoY but up 2% MoM), and radio (down 3% YoY but up 4% MoM).

Net profit was 16% below our estimate. MAJOR reported a Bt1.8bn net profit for 3Q21. The top-line totaled Bt164m, down by 82% YoY and 63% QoQ.

MAJOR to sell SF shares. Healthy balance sheet (excluding cash from selling SF stock). How would MAJOR benefit from selling SF?

The Centre for COVID-19 Situation Administration (CCSA) dropped some of the restrictions that it had imposed in April, effective Jun 21. And the Bangkok governor signed a City Hall order that allows non-air-conditioned restaurants to resume operating at 100% capacity and air-conditioned venues to set aside up to 50% of their space for dine-in customers. The order also allows eateries and restaurants in Bangkok to open until 11pm, up from 9pm previously.

Net loss was in line with our estimate. MAJOR reported a Bt120m net loss for 1Q21. The top-line totaled Bt853m.

Weak Jan-Feb top-10 box office takings …. …but Godzilla vs. Kong reawakened the cinema in Mar. What’s next?

MAJOR reported a Bt125m net loss for 3Q20, a YoY reversal from black ink for 3Q19 but 74% shallower QoQ. Stripping out an extra item—a loss from the disposal of an investment—the core loss would be Bt121m, also a YoY reversal and also 74% shallower QoQ. The net loss was in line with our estimate, but was 39% shallower than the consensus.

Mulan debuted at #1 at the Thai box office last week (Bt26m on its opening weekend), the biggest opening weekend so far this year. But it wasn’t a strong debut. Mulan screened during a long public holiday, so we compared its gross takings with other Hollywood blockbusters that were launched during Songkran festivals, 2015-19. The average box office revenue of the highest gross taker from each Songkran, 2015-19, was Bt72m—Bt18m for Hellboy in 2019, Bt56m for Rampage in 2018, Bt168m for Fast & Furious 8 in 2017, Bt69m for The Jungle Book in 2016, and Bt51m for Fast & Furious 7 in 2015.

We see good signs of an eyeball recovery for OOH media. Three of the biggest ad spenders in 2019—Toyota, Isuzu, and Coca-Cola—disappeared from the top-10 list this year. Unsurprisingly, they typically spend on cinema (25-60% of their total respective spends). Our industry check for July indicates that RS’s media revenue rose by 10-20% MoM, while commerce sales increased by 10-15% MoM. MONO’s TV revenue was up 35% MoM. Also, WORK’s TV revenue increased 25% MoM. BEC’s revenue rose 10-15% MoM. We also surveyed the marketers of the five big FMCG firms to explore the outlook for ad spend.