COMPANY UPDATE

Thailand

Major Cineplex Group (MAJOR.BK/MAJOR TB)*

ผลประกอบการ 3Q60: กาไรอ่อนแอลง

Outperform Maintained Price as of 10 Nov 2017

32.50

12M target price (Bt/shr)

37.75

Unchanged / Revised up (down) (%) Upside/downside (%)

(0.7) 16.2

Key messages

MAJOR รายงานกาไรสุ ทธิ 3Q60 ที่ 302 ล้านบาท (-46% QoQ, -9% YoY) ซึ่ งใกล้เคียงกับที่ตลาดคาดการณ์ แต่หาก ไม่รวมรายการพิเศษ (หลังหักภาษี) กาไรหลักใน 3Q60 จะ อยูท่ ี่ 184 ล้านบาทเท่านั้น ซึ่ งกาไรหลักที่ลดลงอย่างมาก QoQ มีสาเหตุสาคัญมาจากรายได้ที่ลดลงของธุรกิจโรง ภาพยนตร์และธุ รกิจโฆษณา ดังนั้นเพื่อสะท้อนถึงผลการ ดาเนินงานที่อ่อนแอใน 3Q60 ซึ่ งทาให้กาไรหลักงวด 9M60 คิดเป็ นสัดส่ วนแค่ 71% ของประมาณการทั้งปี ของ เราเท่านั้น เราจึงได้ปรับลดประมาณการกาไรจากธุ รกิจ หลักในปี 2560-61 ลง 6% - 7% และขยับไปใช้ราคา เป้ าหมายปี 2561 ที่ 37.75 บาท โดยยังคงแนะนาให้ซ้ื อ MAJOR Trading data Mkt cap (Btbn/US$mn)

29/727

Outstanding shares (mn)

895

Foreign ownership (mn)

392

3M avg. daily trading (mn) 52-week trading range

3 29.00 – 36.50

(Bt) Performance (%)

3M

6M

Absolute

8.3

-4.4

12M 6.6

Relative

0.1

-12.6

-5.7

Quarterly EPS Bt

1Q

2Q

3Q

4Q

2015

0.22

0.55

0.38

0.16

2016

0.25

0.61

0.37

0.10

2017

0.29

0.62

0.34

NA

Event งวด 3Q60 อยูท่ ี่ 302 ล้านบาท (-46% QoQ, -9% YoY) ซึ่งใกล้เคียงกับที่ตลาดคาดการณ์ โดยกาไรสุทธิ รวมช่วง 9M60 อยูท่ ี่ 1.1 พันล้านบาท (+1.4% YoY) lmpact รายได้ลดลงฉุ ดให้ กาไรหลักลดลงอย่างมาก QoQ กาไรสุทธิ ใน 3Q60 นั้นได้รวมรายการพิเศษ 148 ล้านบาทอยู่ (กาไรจากการขายหุ ้น และค่าสิ นไหม ทดแทนจากบริ ษทั ประกัน) ซึ่ งหากไม่รวมรายการพิเศษ (หลังหักภาษี) กาไรหลักใน 3Q60 จะอยูท่ ี่ 184 ล้านบาทเท่านั้น (-59% QoQ, -14% YoY) ซึ่งกาไรหลักที่ลดลงอย่างมาก QoQ มีสาเหตุสาคัญมาจาก รายได้ที่ลดลงของธุรกิจโรงภาพยนตร์ เมื่อเทียบกับช่วง high season ใน 2Q และรายได้ที่ลดลงจากธุรกิจ โฆษณา ส่ วนการที่กาไรหลักลดลง YoY ก็เป็ นผลมาจากอัตรากาไรขั้นต้นที่ลดต่าลงจาก 36.6% ใน 3Q59 เหลือ 32.4% แม้วา่ รายได้จะเพิ่มขึ้น YoY ก็ตาม ผลการดาเนินงานน่ าจะดีขนึ้ ใน 4Q60 เราคาดว่ากาไรหลักจะกลับมาโตได้อีกครั้งทั้ง QoQ และ YoY ใน 4Q60 โดยกาไรที่คาดว่าจะเพิ่มขึ้น QoQ จะเป็ นผลมาจากรายได้ที่เพิ่มขึ้นจากทั้งธุรกิจโรงภาพยนตร์ (ธุรกิจหลัก) จากโปรแกรมหนังเด็ดที่ รอลงโรงฉายใน 4Q60 อย่างเช่น Thor (Ragnarok), Justice League and Star Wars: The Last Jedi ซึ่ งคาดว่าจะช่วยหนุนทั้งยอดขายตัว๋ รวมทั้งการจาหน่ายเครื่ องดื่ มและขนมขบเคี้ยว ในขณะ ผลการดาเนิ นงานที่คาดว่าจะดีข้ ึน YoY จะมาจากฐานที่ต่าใน 4Q59 ซึ่งมีผลขาดทุนหลัก 38 ล้านบาท ปรับลดประมาณการกาไรจากธุรกิจหลักในปี 2560-2561 เพือ่ สะท้ อนถึงผลประกอบการ 9M60 เราได้ปรับประมาณการกาไรปี 2560-61 เพื่อสะท้อนถึงผลประกอบการที่อ่อนแอใน 3Q60 ซึ่งทาให้ กาไรหลักในงวดอยูท่ ี่ 809 ล้านบาท หรื อคิดเป็ นเพียง 71% ของประมาณการกาไรปี FY2560 ของเรา โดยเราได้ปรับสมมติฐานในประมาณการกาไรปี 2560-61 ดังนี้ i) ปรับราคาค่าตัว๋ เฉลี่ยลง 4% - 6% แต่ เพิ่มจานวนผูช้ มขึ้นอีก 2% ตามการขยายสาขาใหม่ และ ii) ปรับลดประมาณการรายได้จากธุรกิจโฆษณา ลง 9% - 10% ซึ่งหลังปรับสมมติฐานดังกล่าวแล้วทาให้ประมาณการกาไรจากธุรกิจหลักในปี 2560-61 ลดลงจากเดิม 6% - 7% เหลือ 1.06 พันล้านบาทในปี 2560 (+20% YoY) และ 1.22 พันล้านบาท (+15% YoY) ในปี 2561 Valuation and action การปรับลดประมาณการ และขยับไปใช้ราคาเป้ าหมายปี 2561 ทาให้เราได้ราคาเป้ าหมายใหม่ที่ 37.75 บาท (PER 24x) เรายังคงแนะนาให้ซ้ื อ MAJOR เนื่องจาก i) คาดว่ากาไรจากธุรกิจหลักจะเติบโตอย่าง แข็งแกร่ งในปี 2560-61 ii) อัตราผลตอบแทนจากเงินปั นผลน่าสนใจที่ 2% สาหรับงวด 2H60 และ 4.2% สาหรับปี 2561 และ iii) ยังมี upside จากราคาตลาดอยูอ่ ีก 16.2% Risks รายได้จากการฉายภาพยนตร์ ต่าเกินคาดในปี 2560

Share price chart 38

20

36

Key financials and valuations

10 34 32

0

30 (10)

28 26 Nov-16

Jan-17

Apr-17

Share Price

Source: SET

PiyathidaSonthisombat 66.2658.8888 Ext.8852 [email protected]

Jun-17

Aug-17

Price performance relative to SET

(20) Nov-17

Revenue (Btmn) Gross Profit (Btmn) EBIT(Btmn) Net Profit (Btmn) Normalized Profit (Btmn) EPS(Bt) DPS(Bt) EPSgrowth (%) P/E(x) P/B (x) EV/EBITDA (x) Net debt/Equity (x) Dividend yield (%) Return on Average Equity (%)

Dec-14A 8,623 3,148 1,084 1,086 1,000 1.22 1.05 3.0 22.7 3.87 10.8 0.6 3.8 17.4

Dec-15A 8,580 3,028 1,015 1,171 981 1.31 1.15 7.5 26.9 4.73 14.0 0.7 3.3 18.0

Dec-16A 8,745 3,165 753 1,188 887 1.33 1.20 1.2 24.7 4.36 14.9 0.7 3.7 17.8

Dec-17F 9,287 3,603 1,068 1,455 1,065 1.61 1.20 20.9 20.2 4.11 13.2 0.6 3.7 21.0

Dec-18F 10,068 3,981 1,233 1,424 1,224 1.57 1.35 (2.1) 20.7 3.94 11.6 0.5 4.2 19.5

Source: KGI Research

November 13, 2017

*The Company may be issuer of Derivative Warrants on these securities. http://research.kgi.com; Bloomberg: KGIT

Please see back page for disclaimer

1

Thailand

Major Cineplex Group

Figure 1: 3Q17 earnings review Bt mn Revenue Gross Profit Operating Expenses Operating Profit Operating EBITDA Other incomes Extra items Interest Expense Pre-tax Profit Current taxation Minorities Net Profit EPS(Bt) Norm Profit Percent Gross margin SG&A/sales Norm profit margin

3Q17 2,200 712 (601) 111 504 143 148 (33) 369 (62) (4) 302 0.34 184 3Q17 32.4 27.3 8.4

3Q16 YoY (%) 2,127 3.5 779 (8.6) (595) 1.0 184 (39.7) 509 (0.8) 112 27.9 149 (1.0) (34) (3.4) 411 (10.2) (73) (15.2) (5) (11.0) 333 (9.1) 0.37 (9.1) 213 (13.7) 3Q16 YoY (ppts) 36.6 (5.5) 28.0 6.8 10.0 (7.9)

2Q17 QoQ (%) 2,779 (20.8) 1,053 (32.3) (570) 5.4 482 (77.0) 794 (36.5) 117 22.2 127 16.6 (36) (7.5) 691 (46.6) (130) (52.2) (6) (27.8) 554 (45.5) 0.62 (45.5) 453 (59.4) 2Q17 QoQ (ppts) 37.9 (5.5) 20.5 6.8 16.3 (7.9)

9M17 7,114 2,481 (1,725) 756 1,826 337 388 (107) 1,374 (246) (9) 1,119 1.25 809 9M17 34.9 24.2 11.4

9M16 YoY (%) Comments 6,850 3.9 Increased revenue YoY mainly due to growth in cinema segment along with branch expansion 2,569 (3.4) (1,711) 0.8 858 (11.9) Lower gross margin pressured operating profit YoY 1,780 2.6 311 8.4 295 31.5 Extra items in 3Q17 came fromgain fromdisposal of investment and insurance cliam (107) (0.1) 1,356 1.3 (229) 7.2 (24) (61.0) 1,103 1.4 1.23 1.3 867 (6.8) Core profit pressured by declining gross margin 9M16 YoY (%) 37.5 (2.6) 25.0 (0.7) 12.7 (1.3)

Source: Company data

Figure 2: Operation statistics Revenue (Btmn) Cinema Advertising Bowling Rental Movie content Revenue (Percent) Cinema Advertising Bowling Rental Movie content Cinema business -Number of screens -Number of guest -Average ticket price

3Q16 2,127 1,521 296 127 119 64

4Q16 1,895 1,356 225 110 117 87

1Q17 2,134 1,621 236 103 113 61

2Q17 2,779 2,258 275 107 112 27

3Q17 2,201 1,625 251 124 102 99

71.5 13.9 6.0 5.6 3.0

71.6 11.9 5.8 6.2 4.6

76.0 11.1 4.8 5.3 2.9

81.3 9.9 3.9 4.0 1.0

73.8 11.4 5.6 4.6 4.5

641 7.0 165

678 6.4 161

678 7.4 161

689 10.6 170

702 NA NA

QoQ (20.8) (28.0) (8.7) 15.9 (8.9) 266.7

YoY 3.5 6.8 (15.2) (2.4) (14.3) 54.7

(7.4) 1.5 1.8 0.6 3.5

2.3 (2.5) (0.3) (1.0) 1.5

1.9 NA NA

9.5 NA NA

Source: Company data

November 13, 2017

*The Company may be issuer of Derivative Warrants on these securities. http://research.kgi.com; Bloomberg: KGIT

Please see back page for disclaimer

2

Thailand

Major Cineplex Group

Figure 3: Company profile Major Cineplex Group Public Company Limited (MAJOR) is a leading

Figure 4: Business structure

cinema service provider in Thailand with largest market share of more

MAJOR

than 70%. The company also provides other businesses that are advertising

business,

bowling

business,

rental

business

and

movie

Cinema operation

content business. The company’s core revenue comes from cinema Bowling and karaoke services

business which represented 72% of total sales and services revenue in 2016, followed by advertising business that accounted for 15%.

Advertising and media services

Rental and services

Movie content

Source: Company data Source: Company data

Figure 5: Breakdown total sales and services revenue Figure 6: Total sales and service revenue

Breakdown revenue by segment, percent 2.9 6.1 5.8 10.8

2.9 4.4 4.4 10.0

3.0 5.6 6.0 13.9

2.9 5.3 4.8 11.1

4.6 6.2 5.8 11.9

1.0 4.0 3.9 9.9

4.5 4.6 5.6 11.4

Sales and service revenue, Bt bn 3.0 2.5 2.0

78.2

74.4

76.0

71.6

71.5

81.3

73.8

1.5 1.0

Source: Company data

3Q17

0.0

3Q17

Cinema

0.5

2Q17

Advertising

3Q17

2Q17

Bowling

2Q17

1Q17

Rental

1Q17

4Q16

Movie content

4Q16

3Q16

3Q16

2Q16

2Q16

1Q16

1Q16

Source: Company data

Figure 7: Cinema revenue Figure 8: Net profit usually hit the peak in 2Q

Cinema revenue, Bt bn

Net profit, Bt bn

2.5

0.6

2.0

0.5

1.5 0.4

1.0

0.3

1Q17

4Q16

3Q16

Source: Company data and KGI Research

2Q16

0.0

1Q16

3Q17

2Q17

1Q17

4Q16

0.1

3Q16

0.0 2Q16

0.2

1Q16

0.5

Source: KGI Research

Figure 9: Company’s PER Figure 10: Company’s PBV

PER, times

PBV, times

35.0

7.0

30.0 25.0

+2.0 sd = 27.3x

6.0

+1.0 sd = 23.8x 20.0

4.0

-1.0 sd = 16.8x

-2.0 sd = 13.4x

10.0

5.0 

5.0

Average = 20.3x

15.0

+2.0 sd = 5.0x +1.0 sd = 4.3x Average = 3.6x

3.0

-1.0 sd = 3.0x -2.0 sd = 2.3x

2.0 





2017F

2018F

1.0 







2017F

2018F

Source: Bloomberg, KGI Research Source: Bloomberg, KGI Research

November 13, 2017

*The Company may be issuer of Derivative Warrants on these securities. http://research.kgi.com; Bloomberg: KGIT

Please see back page for disclaimer

3

Thailand

Major Cineplex Group

Quarterly income statement Mar-15A

Jun-15A

Sep-15A

1,749 (1,145) 604 (445) 12 172 (309) 481 25 2 23 (41) (41) 52 208 (51) (2) 43 199 0.22

2,666 (1,653) 1,013 (527) 12 498 (287) 785 25 5 20 (39) (39) 72 556 (120) (6) 61 491 0.55

2,189 (1,450) 739 (525) 13 228 (338) 566 31 1 31 (37) (37) 73 295 (83) (2) 133 343 0.38

1,976 (1,305) 671 (516) 15 170 (292) 462 (22) (1) (21) (38) (38) 40 150 (46) (1) 36 139 0.16

34.5 9.8 27.5 11.4

38.0 18.7 29.5 18.4

33.8 10.4 25.9 15.7

2.7 12.7 4.2 42.0

0.9 (4.2) (5.4) 10.0

1.7 (18.0) (3.0) 16.9

Income Statement (Bt mn) Revenue Cost of Goods Sold Gross Profit Operating Expenses Other incomes Operating Profit Depreciation of fixed assets Operating EBITDA Non-Operating Income Interest Income Other Non-op Income Non-Operating Expenses Interest Expense Other Non-op Expenses Net investment Income/(Loss) Pre-tax Profit Current taxation Minorities Extraordinary items Net Profit EPS(Bt) Margins (%) Gross profit margin Operating margin Operating EBITDA margin Net profit margin Growth (%) Revenue growth Operating growth Operating EBITDA growth Net profit growth

Dec-15A Mar-16A

Jun-16A

Sep-16A

Dec-16A Mar-17A

Jun-17A

Sep-17A

1,936 (1,265) 672 (514) 13 170 (262) 432 14 1 14 (38) (38) 58 205 (37) (7) 65 226 0.25

2,787 (1,669) 1,118 (601) 12 529 (310) 839 25 2 23 (35) (35) 77 595 (119) (12) 80 544 0.61

2,127 (1,347) 779 (595) 13 197 (311) 509 30 0 30 (34) (34) 69 262 (73) (5) 149 333 0.37

1,896 (1,300) 596 (701) 13 (92) (330) 239 9 2 7 (37) (37) 53 (66) (8) 5 154 85 0.10

2,134 (1,418) 716 (553) 11 174 (354) 528 25 1 24 (39) (39) 41 201 (53) 1 113 262 0.29

2,779 (1,727) 1,053 (570) 12 495 (299) 794 24 2 22 (36) (36) 81 564 (130) (6) 127 554 0.62

2,200 (1,488) 712 (601) 13 124 (381) 504 47 1 46 (33) (33) 83 221 (62) (4) 148 302 0.34

34.0 8.6 23.4 7.0

34.7 8.8 22.3 11.7

40.1 19.0 30.1 19.5

36.6 9.3 23.9 15.6

31.4 (4.8) 12.6 4.5

33.6 8.1 24.7 12.3

37.9 17.8 28.6 20.0

32.4 5.6 22.9 13.7

(7.0) (9.8) (9.2) (33.0)

10.7 (0.8) (10.1) 13.8

4.5 6.2 6.8 10.9

(2.9) (13.5) (10.2) (3.0)

(4.1) (153.8) (48.3) (38.6)

10.2 2.0 22.1 15.7

(0.3) (6.5) (5.3) 1.9

3.5 (37.4) (0.8) (9.1)

Source: KGI Research

Peer comparison – Key valuation stats

WORK* MONO* RS MAJOR* PLANB* BEC Sector

Rating N OP N OP OP UR Overweight

Target price (Bt) 109.00 5.75 19.20 37.75 7.90 NA

Current price (Bt) 98.50 4.30 21.60 32.50 6.80 16.50

Upside (%) 10.7 33.7 (11.1) 16.2 16.2 NA

16 EPS (Bt) 0.48 (0.08) (0.10) 1.33 0.10 0.61 2.34

17F EPS (Bt) 2.60 0.06 0.25 1.61 0.16 0.47 5.15

18F EPS (Bt) 3.63 0.17 0.58 1.57 0.21 0.58 6.74

17F EPS 18F EPS 17F PER growth (%) growth (%) (x) 446.1 39.5 37.9 NM 184.7 72.1 NM 135.2 87.2 21.0 (2.1) 20.2 64.1 28.2 41.4 (23.0) 23.4 35.1 120.5 30.9 49.0

18F PER (x) 27.2 25.3 37.1 20.7 32.3 28.4 28.5

17F PBV 18F PBV 17F Div 17F ROAE (X) (X) Yield (%) (%) 10.5 8.9 1.8 31.7 5.0 4.3 0.6 7.6 16.7 9.0 0.7 21.1 4.1 3.9 3.7 21.0 6.8 6.1 1.0 17.1 12.8 7.1 0.5 14.5 9.3 6.5 1.4 19.7

Source: KGI Research, Bloomberg consensus

November 13, 2017

*The Company may be issuer of Derivative Warrants on these securities. http://research.kgi.com; Bloomberg: KGIT

Please see back page for disclaimer

4

Thailand

Major Cineplex Group

Balance Sheet As of 31 Dec (Bt mn) Total Assets Current Assets

Profit & Loss 2014A

2015A

2016A

2017F

2018F

13,932

14,246

14,725

14,598

15,379

2,382

2,030

2,350

2,136

3,054

Cash & STInvestments

577

312

531

249

818

Inventories

154

183

98

139

201

1,307

1,181

1,256

1,254

1,510

Accounts Receivable

343

355

465

494

525

Non-current Assets

Others

11,551

12,216

12,375

12,462

12,325

LTInvestments

3,424

3,575

3,553

3,527

3,503

Net fixed Assets

6,730

7,358

7,591

7,659

7,516

Others

1,397

1,283

1,231

1,275

1,307

Total Liabilities

7,546

7,598

8,007

7,440

7,906

Current Liabilities

4,542

5,480

6,420

5,399

5,901

Accounts Payable

1,899

1,908

1,761

1,857

2,215

STBorrowings

2,376

3,389

4,494

3,364

3,493

267

183

165

178

193

Long-term Liabilities

3,003

2,118

1,587

2,041

2,005

Long-term Debts

2,188

1,287

764

1,184

1,166

816

831

823

856

839

6,387

6,648

6,718

7,158

7,473

Others

Others Shareholders' Equity Common Stock

890

893

895

905

905

Capital Surplus

3,968

4,015

4,053

4,083

4,083

Retained Earnings

1,111

1,295

1,412

1,780

2,072

418

445

359

390

413

Others

Key Ratios 2014A

2015A

2016A

2017F

2018F

Forecast Drivers 30.6

28.5

Sales

11.8

(0.5)

1.9

6.2

8.4

OP

17.8

(6.4)

(25.8)

41.8

15.5

29.7

32.7

34.3

17.6

(2.4)

(12.3)

13.4

13.4

3.3

7.8

1.5

22.4

(2.1)

EPS

3.0

7.5

1.2

20.9

(2.1)

Profitability (%) Gross Margin

36.5

35.3

36.2

38.8

39.5

Operating Margin

12.6

11.8

8.6

11.5

12.2

EBITDA Margin

26.6

26.1

22.5

24.0

25.1

Net Profit Margin

12.6

13.6

13.6

15.7

14.1

ROAA

7.9

8.3

8.2

9.9

9.5

ROAE

17.4

18.0

17.8

21.0

19.5

0.0

0.0

0.0

0.0

0.0

Net Debt/Equity (%)

62.0

65.3

70.1

59.9

51.3

Interest Coverage (x)

6.3

6.6

5.2

7.2

8.3

Interest & STDebt Coverage (x)

0.4

0.3

0.2

0.3

0.3

Cash Flow Interest Coverage (x)

(13.0)

(15.3)

(14.8)

(18.8)

(18.6)

Cash Flow/Interest & STDebt (x)

1.0

0.7

0.5

0.9

0.8

Current Ratio (x)

0.5

0.4

0.4

0.4

0.5

Quick Ratio (x)

0.5

0.3

0.4

0.4

0.5

3,961

4,341

4,708

4,286

3,833

Stability

Net Debt (Bt mn) Per Share Data (Bt) EPS

2016A 8,745 (5,580) 3,165 (2,412) 753 1,214 1,967 579 4 574 (144) (144) 256 1,444 (237) (19) 1,188 1.33

2017F 9,287 (5,684) 3,603 (2,535) 1,068 1,163 2,231 649 5 644 (148) (148) 277 1,845 (369) (21) 1,455 1.61

2018F 10,068 (6,087) 3,981 (2,749) 1,233 1,296 2,529 431 5 426 (149) (149) 293 1,808 (362) (23) 1,424 1.57

Year to 31 Dec (Bt mn)

2014A

2015A

2016A

2017F

2018F

Operating Cash Flow

2,240

2,365

2,127

2,783

2,775

Net Profit

1,342

1,482

1,444

1,845

1,808

Depreciation & Amortization

1,245

1,226

1,214

1,163

1,296

1.2

1.3

1.3

1.6

(417)

(58)

(193)

52

(36)

70

(285)

(337)

(277)

(293)

(883)

(1,480)

(1,239)

(1,166)

(1,069)

(602)

(1,434)

(1,258)

(1,100)

(1,000)

Others Investment Cash Flow

NP

Gross Debt/Equity (%)

2015A 8,580 (5,553) 3,028 (2,013) 1,015 1,226 2,241 384 7 378 (155) (155) 237 1,482 (300) (11) 1,171 1.31

Source: KGI Research

Change in Working Capital

Number of guest (mn) Growth (% YoY)

EBITDA

2014A 8,623 (5,475) 3,148 (2,064) 1,084 1,211 2,296 232 12 220 (173) (173) 199 1,342 (271) 15 1,086 1.22

Cash Flow

Source: KGI Research

Year to 31 Dec (Bt mn)

Year to 31 Dec (Bt mn) Revenue Cost of Goods Sold Gross Profit Operating Expenses Other incomes Operating Profit Depreciation of fixed assets Operating EBITDA Non-Operating Income Interest Income Other Non-op Income Non-Operating Expenses Interest Expense Other Non-op Expenses Equity Income/(Loss) Pre-tax Profit Current taxation Minorities Extraordinary items Net Profit EPS(Bt)

Net CAPEX Change in LTInvestment

1

Change in Other Assets

(282)

1

18

-

-

(46)

1

(66)

(69)

Free Cash Flow

1,357

886

888

1,617

1,706

Financing Cash Flow

(1,067)

(841)

(476)

(1,755)

(1,021)

Change in Share Capital

-

-

Net Change in Debt

(277)

61

103

566

Change in Other LTLiab.

(850)

(944)

290

45

Net Cash Flow

11

-

(709)

(1,042)

111

(1,057)

412

(1,132)

(139)

685

Source: KGI Research

Rates of Return on Invested Capital Year

1-

COGS Revenue

+

Depreciation Revenue

+

Operating Exp. Revenue

Operating

=

Margin

Dec-14A

63.5%

14.0%

23.9%

-1.5%

Dec-15A

64.7%

14.3%

23.5%

-2.5%

Dec-16A

63.8%

13.9%

27.6%

-5.3%

Dec-17F

61.2%

12.5%

27.3%

-2.5%

Dec-18F

60.5%

12.9%

27.3%

1.6

-1.0% Capital

2.5

2.7

2.4

3.1

3.1

7.2

7.4

7.5

7.9

8.3

Dec-14A

-0.05

0.78

0.20

1.07

SPS

9.7

9.6

9.8

10.3

11.1

Dec-15A

-0.01

0.86

0.19

0.96

EBITDA/Share

2.6

2.5

2.2

2.5

2.8

DPS

1.1

1.2

1.2

1.2

1.4

Dec-16A Dec-17F Dec-18F Year

-0.02 0.01 0.00 Operating

0.87 0.82 0.75 Capital

0.19 0.19 0.18 Cash

0.96 0.98 1.08 After-tax Return

Asset Turnover (x)

0.6

0.6

0.6

0.6

0.7

Days Receivables

52.2

52.9

50.9

49.3

50.1

Days Inventory

7.6

x

Turnover

x

Revenue

Tax Rate

=

=

Turnover

on Inv. Capital

10.2

Dec-14A

-1.5%

1.1

120.2

-1.9

11.0

11.1

Days Payable

(210.8)

(229.5)

(211.6)

(183.3)

(186.7)

Dec-15A

-2.5%

1.0

120.3

-2.8

Cash Cycle

273.9

293.5

271.6

240.2

247.0

Dec-16A

-5.3%

1.0

116.4

-5.9

Dec-17F

-1.0%

1.0

100.0

-1.0

Dec-18F

-0.6%

1.1

100.0

-0.7

Source: KGI Research

9.2

Margin

Revenue

+

Other Assets

BVPS

Revenue

+

Net PPE

CFPS

Activity

1/

Working Capital

Year

Source: KGI Research

November 13, 2017

*The Company may be issuer of Derivative Warrants on these securities. http://research.kgi.com; Bloomberg: KGIT

Please see back page for disclaimer

5

Thailand

Major Cineplex Group

Major Cineplex Group Plc – Recommendation & target price history Date

Rating

Target

Price

26-Jul-17 29-Mar-17

Outperform Neutral

38.00 37.00

30.00 33.75

40 38 36 34

32 30 28 26 Nov-16

Dec-16

Jan-17

Feb-17

Mar-17

Apr-17

Share price

May-17

Jun-17

Target price lowered

Jul-17

Aug-17

Sep-17

Oct-17

Nov-17

Target price raised

Source: KGI Research

KGI Locations

China

Shanghai

Room 1907-1909, Tower A, No. 100 Zunyi Road, Shanghai, PRC 200051 Room 24D1, 24/F, A Unit, Zhen Ye Building,2014 Bao’annan Road,

Shenzhen

Taiwan

Shenzhen, PRC 518008 Taipei

700 Mingshui Road, Taipei, Taiwan Telephone886.2.2181.8888 ‧

Hong Kong

Facsimile886.2.8501.1691

41/F Central Plaza, 18 Harbour Road, Wanchai, Hong Kong Telephone 852.2878.6888

Thailand Bangkok

Facsimile 852.2878.6800

8th - 11th floors, AsiaCentreBuilding 173 South Sathorn Road, Bangkok10120, Thailand Telephone 66.2658.8888

KGI's Ratings

Facsimile 66.2658.8014

Rating

Definition

Outperform (OP)

The stock's excess return* over the next twelve months is ranked in the top 40% of KGI's coverage universe in the related market (e.g. Taiwan).

Neutral (N)

The stock's excess return* over the next twelve months is ranked in the range between the top 40% and the bottom 40% of KGI's coverage universe in the related market (e.g. Taiwan).1.3

Under perform (U)

The stock's excess return* over the next twelve months is ranked in the bottom 40% of KGI's coverage universe in the related market (e.g. Taiwan).

Not Rated (NR)

The stock is not rated by KGI Securities.

Restricted (R)

KGI policy and/or applicable law regulations preclude certain types of communications, including an investment recommendation, during the course of KGI's engagement in an investment banking transaction and in certain other circumstances.

Excess return = 12M target price/current priceNote

Disclaimer

November 13, 2017

KGI Securities no event shall profits, arising to buy or sell

When an analyst publishes a new report on a covered stock, we rank the stock's excess return with those of other stocks in KGI's coverage universe in the related market. We will assign a rating based on its ranking. If an analyst does not publish a new report on a covered stock, its rating will not be changed automatically. (Thailand) Plc. (“The Company”) disclaims all warranties with regards to all information contained herein. In the Company be liable for any direct, indirect or any damages whatsoever resulting from loss of income or by utilization and reliance on the information herein. All information hereunder does not constitute a solicitation any securities but constitutes our sole judgment as of this date and are subject to change without notice.

*The Company may be issuer of Derivative Warrants on these securities. http://research.kgi.com; Bloomberg: KGIT

Please see back page for disclaimer

6

Major Cineplex Group

Nov 13, 2017 - Pre-tax Profit. 369. 411. (10.2). 691. (46.6). 1,374. 1,356. 1.3. Current taxation. (62) ..... coverage universe in the related market (e.g. Taiwan).

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