Movie producer mm2 Asia poised for stellar growth, says DBS

Its overseas expansion plans are gaining traction.

Listed movie production company mm2 Asia can expect steady growth on back of rising demand for local production in the region, according to a report by DBS.

DBS expects the company to continue to grow its presence in Taiwan, Hong Kong and China, by leveraging on the business relationships it has established.

“We expect mm2 to grow at EPS CAGR of 40% for FY15 to FY18F. To support this growth, mm2 intends to spread its wings to one of the most lucrative movie market – China. The group has already co-produced several productions in China since 2013 and is currently working on a few movies in China,” DBS said. 

“Besides movie production and distribution which offers high gross margin of about 40% to 45%, mm2 recently acquired five cineplexes in Malaysia and some related businesses. Cinemas will provide a source of recurring income to the group and cost savings in the longer term, as mm2 usually has to pay about 50% of its gross intake receipts for rental of cinemas,” DBS added.