News Analysis: To report net loss for 1H22
- Net loss for 1H22 mainly due to 1) foreign exchange loss and 2) delay in contract signing
- Catalysts include the resumption of concert production
- The group has planned three concert productions in 2H22; we have not factored any contribution from concert productions in our forecasts for FY22F
- We currently have a HOLD call with TP: S$0.45
WHAT’S NEW
G.H.Y Culture & Media expects to report a net loss for 1H22. The loss is primarily attributable to:-
1) Foreign exchange loss, arising from the appreciation of the SGD against the Chinese Renminbi in 6M22 as the group has significant operations in China. From the beginning of the year till end June 2022, SGD has appreciated by c.5% vs RMB;
2) Delay in contract signings. Contract signings with some customers were delayed in 1H22 due to the resurgence of COVID-19 cases. The tightened measures in China that begun in March 2022 has resulted in difficulties in finalising contracts, thereby resulting in a decrease in revenue contribution to the group in 1H22. This mainly affects the new contracts. For existing productions, the bulk of the filming is not affected, as the group has already implemented various measures in place, including movement restrictions for artistes till the completion of the whole production. The bulk of the productions for 1H22 are in China.
Catalysts to look out for include the resumption of the concert production. The group has planned for three concerts in 2H22. These include a one night concert in August for Power Station, a Taiwanese band; one night concert in November for Guns N Roses, an American hard rock band and a two-night concert in December for Jay Chou, a Taiwanese singer-cum songwriter. We have not factored in any contributions for concert production in FY22F.
More details after the release of the 1H22 results in the next few days. We currently have a HOLD call with target price of S$0.45.
