Major Cineplex Group PCL (MAJOR) said this week that its business has started to gradually recover as more movies are coming on screen in the second half of the year, saying that it expects a good return from the cinema segment.
The company has encountered serious effects from coronavirus which led to social distancing practices and lockdowns measures. Various MAJOR businesses had to close temporarily in the past months.
According to KGI securities, MAJOR reported a net loss of 475 million baht. The result was 26 per cent below KGI’s forecast and 8 per cent below the market consensus.
MAJOR said that the business had already bottomed out in the second quarter of 2020. Some movies that have been postponed would enable the company to gain more revenue.
Meanwhile, an effective cost control was implemented causing no liquidity problems, said MAJOR investor relations.
More movies on the line
A KGI analyst foresees MAJOR’s core earnings gradually improving from the third quarter onward backed by easing of lockdown and social distancing measures and stronger movie line ups since late July.
Though MAJOR’s 2020 first-half core loss accounted for 63 per cent of KGI’s full year forecast, the 2020 earnings forecasts are maintained at a net loss of 848 million baht.
KGI rates ‘Neutral’ for MAJOR as a strong earnings recovery is expected in 2021 coupled with a 2021 dividend yield of 5.0 per cent, along with the target price at 15.10 baht per share.
Land and House Securities expects Major to earn 70 per cent of the revenue due to the social distancing policy. The company would see a profit of 1,055 million in the fourth quarter of 2020, said a Land and House analyst.
Land and House evaluates the MAJOR target price at 18 baht per share while the dividend yield is expected to 7.3 per cent.
As the market closed on Wednesday, MAJOR shares stood at 16.30 baht per share, a decrease of 0.30 baht or -1.81 per cent, with the transaction value of 77.2 million baht.
