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DIS: NYS

Walt Disney Co.

TRADE WEEK

HALOiPATS

22 MARCH 2021

22 MARCH 2021

Trade of the Week: Walt Disney Co. Market cap. US$346.9 Bn

COMPANY INFORMATION

DIS:NYS

Why we recommend Disney as a BUY opportunity?.

1. We believe the recovery from COVID-19 will be faster than the recovery the parks faced following the financial recession in 2009. The dynamic of the pullback in 2020, influenced by lack of supply, negated the need for outsized discounting, suggesting a faster recovery particular in light of what we believe to be notable pent- up demand. We also see changes in advanced reservation systems and annual pass programs leading to better yield management.2. Some capital expenditures were delayed by COVID-19 but no projects canceled. While Disney was able to take advantage of the closures and prioritize some capital improvements, many were delayed by COVID-19, including the Star Wars: Galactic Cruiser hotel at Disney World in Hollywood Studios, and Avengers Campus in Disneyland, both originally anticipated to open in 2020. We look for some of these to be completed by this summer, and we anticipate a refresh in parts of Disney World in time for the park’s 50th anniversary beginning October 1.Net / net: We see the recovery of Disney’s parks due to significant pent-up demand as a key catalyst for DIS shares. While attention has shifted to the explosive growth of Disney’s direct-to-consumer businesses during COVID-19, we are very positive on the recovery of the parks division and expect attendance to exceed FY19 levels by FY23 if not before. We have seen significant pent-up demand at the parks globally, and capacity restraints have created a need for advanced reservations systems across Disney’s parks, which we expect will continue to benefit Disney’s dynamic pricing post-pandemic.In our opinion the scale of the post-pandemic recovery is not in the current price of the shares and this, combined with the hugely successful Disney + DTC business (100 million global subscribers today and forecast to be 260 million by 2024) make Disney a core holding in any overseas portfolio.

By the numbers:Market cap. US$346.9 BnWall Street Analyst rating (Bloomberg) 26 Buys 6 Holds 2 SellsYTD performance: +5.5% (USD) S&P 500 +4.18%Walt Disney is held in Macrovue’ top performing “Entertainment” thematic portfolio or ”Vue” which has gained 49.18% over the past 12 months.

While this company needs no introduction, investors may not realise the scale and scope of Disney’s various business lines. Essentially the Walt Disney Company is a diversi�ed international entertainment and media “conglomerate” (in a good way) with the following business segments: Media Networks, Studio Entertainment, Parks, Experiences and Products, and Direct-to-Consumer and International.Media Networks is the primary unit and contains the television networks and stations (ABC, ESPN and the Disney Channel), cable channels and production and distribution companies airing content such as the NBA, NFL and The Bachelor.Studio Entertainment brings movies, music and stage plays to consumers around the world delivered through a variety of studios including Disney, Pixar Animation Studios, Marvel Studios, Lucas�lm and 20th Century Studios for their �lms and Walt Disney Records, Hollywood Records and Disney Theatrical Productions for their music and stage show o�erings.Technology, media distribution and advertising sales are headed under the Direct-To-Consumer and International segment which creates and delivers personalized entertainment experiences through DTC services such as Disney+ leveraging the rich catalogue of intellectual properties owned by the Walt Disney Company.Disney Parks, Experiences and Products brings Disney’s stories, characters, and franchises to life through theme parks and resorts, cruise and vacation experiences, and consumer products such as toys, apparel, books and video games. The original Disneyland in Anaheim, California and Disney World in Orlando, Florida are the most visited but there are theme parks in Shanghai, Paris, Hong Kong, and Tokyo. Last Wednesday, Disney announced that after being closed for one year, California’s two Disney theme parks (Disneyland and California Adventure) will reopen on April 30th 2021. The two parks will operate at around 15% capacity to start. Disney World in Florida reopened in July 2020 and is now operating at 35% capacity and Disneyland Paris is expected to reopen on 2nd April 2021.While we recognise the newly successful DTC streaming business (Disney +) will likely remain the main driver of future stock performance, we believe the legacy parks business will come into greater focus over the next 12 months as the pace of recovery has an outsized impact on pro�tability.

TRADE IDEA

BUY

22 MARCH 2021

COMPANY DATA

TRADE IDEA

BUY

Very StrongGlossary Strong Neutral Weak Very Weak

Trade of the Week: Walt Disney Co. Market cap. US$346.9 Bn

DIS:NYS

Performance Charts - Walt Disney Co. price performance

We believe the recovery from COVID-19 will be faster than the recovery the parks faced following the �nancial recession in 2009. The dynamic of the pullback in 2020, in�uenced by lack of supply, negated the need for outsized discounting, suggesting a faster recovery particular in light of what we believe to be notable pent- up demand. We also see changes in advanced reservation systems and annual pass programs leading to better yield management.

CHART COMMENTARY

22 MARCH 2021

TRADE IDEA

BUY Trade of the Week: Walt Disney Co. Market cap. US$346.9 Bn

DIS:NYS

For more information on thisweek’s trade idea please contactthe iPATS desk on 1300 720 292.

22 MARCH 2021

IMPORTANT INFORMATION

The International Premium Active Trader Service (iPATS) has been designedfor investors who are looking to take advantage of overseas companies.Together with HALO Technologies and Macrovue we can provide clientswith weekly buy, sell and take pro�t opportunities.

This information in this report is provided by Macrovue Limited (ABN 98 600 022 679, AFSL 484264). Please read our Financial Services Guide which contains information about us and the �nancial services we provide and our Privacy Policy which are both available on our website www.macrovue.com.au. The information in this document is general advice only and has been prepared without taking into account your objectives, �nancial situation or needs. For this reason, you should consider the appropriateness of the advice in light of your own objectives, �nancial situation or needs before acting on any advice in this document. Past performance is not a reliable indicator of future performance. Investment in securities involves risk. Share prices rise and fall. The payment of dividends and the return of capital are not guaranteed. Investing in overseas markets exposes you to additional risks including those related to movements in foreign currency exchange rates.HALO is a service provided by HALO Technologies Pty Ltd (ABN: 54 623 830 866) CAR: 1261916 of Amalgamated Australian Investment Solutions Pty Ltd (ABN: 61 123 680 106) AFSL: 314 614.Macrovue Limited and HALO Technologies Pty Ltd are both part of Amalgamated Australian Investment Group Limited (AAIG) (ABN: 81 140 208 288 Level 13, 130 Pitt Street, Sydney NSW 2000).

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