Results Preview 5 Feb 2015

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BUY

2016 TP: Bt33.00 Closing price: Bt28.25

Upside/downside +17%

Sector Media & Publishing

Paid-up shares (shares mn) 892.52

Market capitalization (Bt bn) 26.11

Free float (%) 49.29

12-mth daily avg. turnover (Bt mn) 64.88

12-mth trading range (Bt) 44.00/27.00

Major shareholders (%)

Vicha Poolvaraluck 34.06

Thai NVDR 10.07

State Street Bank and Trust 6.33

Thailand Research Department

Ms. Sukanya Leelarwerachai

License, No. 68790

Major Cineplex Group PCL (MAJOR)

4Q15 earnings slowdown

► Expect 4Q15 normalized profit of Bt162mn, down 23% QoQ

and 9% YoY.

► Revised down 2015-16 earnings forecasts to reflect weaker

ticket sales.

► Maintain BUY recommendation, but revised down target price

to Bt33.00.

4Q15 normalized profit expected to decline QoQ and YoY

Although the fourth quarter is normally the high season for domestic

consumption, MAJOR’s 4Q15 ticket sales remained weak as major

films underperformed compared with the same period last year.

Ticket sales for the top 10 gross box office dropped 11% YoY in

4Q15 as Star Wars 7: Force Awakens which was the top movie,

generated sales almost three time lower than 4Q14’s I Fine Thank

You Love You while there were fewer Thai films than the same

period last year. We expect ticket sales to have declined 3% YoY.

Concession sales (F&B) are expected to improve 5% YoY

supported by collections related to the Star Wars movie. Advertising

income should also be flat YoY amid a slow advertising industry.

Revenue from bowling should drop 5% YoY, as three branches

were closed in 2015, and revenue from selling movie content should

decline 30% YoY as there were no additional recognized film rights

sold to outsiders. In sum, we expect MAJOR’s 4Q15 operating

revenue to decline 3% YoY while normalized profit is expected to

decline 23% QoQ and 9% YoY to Bt162mn.

Revised down 2015-16 earnings and cut 2016 TP to Bt33.00

We revised down our full-year normalized profit forecast by 10%

from Bt1.06bn to Bt957mn in 2015, down 2% YoY, due to weaker

4Q15 ticket sales despite it normally being the peak movie season.

We also slashed 2016 operating revenue 7% to Bt9.45bn and

normalized profit by 12% to Bt1.18bn to reflect some pressure from

the gloomy economy which may lower guest count and prevent

MAJOR from raising ticket prices. We are still positive toward this

year driven by 1) upcoming blockbusters (Figure 2), 2) more Thai

films to draw the upcountry market with more film projectors, 3) first

full year of advertising revenue from theater sponsors that opened

last year. We maintain our BUY recommendation but revised down

our 2016 target price to Bt33.00/share (previous was Bt36/share),

based on target PE of 25x (average PE of the last two years at 22x).

The expected dividend yield of 4% is attractive and the current price

offers 17% upside to our target.

Financial Highlights

(Year to Dec) 2014 2015E 2016E FY2017E

Revenue (Btmn) 8,623 8,668 9,452 9,957

Normalized Profit (Btmn) 978 957 1,180 1,255

Extra items (Btmn) 108 237 - -

Net Profit (Btmn) 1,086 1,194 1,180 1,255

EPS (Bt) 1.22 1.34 1.32 1.41

Normalized EPS (Bt) 1.10 1.07 1.32 1.41

Normalized EPS Growth (%) 19% -2% 23% 6%

P/E (x) 23.2 21.1 21.4 20.1

P/BV(x) 4.0 3.9 3.8 54.0

DPS (Bt) 1.05 1.10 1.14 1.20

Div. Yield (%) 4% 4% 4% 4%

ROE % 15% 15% 17% 18%

Source: SET, AWS

Results Preview 5 Feb 2015

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Figure 2: Blockbuster Highlight in 1Q16 & 2Q16

1Q16 Blockbuster Highlight 2Q16 Blockbuster Highlight

Deadpool (Fox) Captain America: Civil War (Sony)

Batman V Superman: Dawn of Justice (WB) X-Men: Apocalypse (Warner)

Kung Fu Panda 3 (Fox) Teenage Mutant Ninja Turtles 2 (UIP)

The Big Short (UIP) The Huntsman: Winter's War (UIP)

Zoolander 2 (UIP) Finding Dory (Sony)

Pride and Prejudice and Zombie (Mongkol) Alice in Wonderland: Through the Looking Glass (Sony)

The New Adventures of Aladin (MPIC) The Conjuring 2 (Warner)

London Has Fallen (MPIC) Independence Day Resurgence (Warner)

Victor Frankenstrin (Fox) The Legend of Tarzan (Warner)

13 Hours: The Secret Soldiers of Banghazi (UIP) Warcraft (UIP)

Joy (Fox) Now You See Me 2 (UIP)

The Revenant (Fox) Fallen (MPIC)

Steve Jobs (UIP) I Am A Hero (MPIC)

The Finest Hours (Disney)

Hali, Caesar! (UIP)

Grimsby (Sony)

Zootopia (Sony)

Source: MAJOR's presentation

Figure 1: MAJOR's 4Q15 earnings preview

Unit: Btmn 4Q14 1Q15 2Q15 3Q15 4Q15E %QoQ %YoY 2014 2015E %YoY

Revenue 2,124 1,749 2,666 2,189 2,063 -6% -3% 8,623 8,668 1%

Cost of sales 1,393 1,145 1,653 1,450 1,378 -5% -1% 5,475 5,626 3%

Gross profit 730 604 1,013 739 685 -7% -6% 3,148 3,042 -3%

SG&A 555 445 527 525 555 6% 0% 2,064 2,052 -1%

Operating profit 175 159 486 215 130 -39% -26% 1,084 990 -9%

Share of profit from JV 62 52 72 73 70 -4% 13% 199 267 34%

EBIT 124 292 656 465 240 -49% 93% 1,342 1,652 23%

Interest expense 43 41 39 37 37 0% -15% 173 154 -11%

Income taxes 51 51 120 83 41 -51% -21% 271 294 9%

Normalized profit 179 156 430 209 162 -23% -9% 978 957 -2%

One-off items 29 43 61 133 108 237 119%

Net profit 207 199 491 343 162 -53% -22% 1,086 1,194 10%

EPS (Bt/share) 0.23 0.22 0.55 0.38 0.18 -53% -22% 1.22 1.34 10%

Gross Profit Margin (%) 34% 35% 38% 34% 33% 37% 35%

Operating Profit Margin (%) 8% 9% 18% 10% 6% 13% 11%

Normalized Profit Margin (%) 8% 9% 16% 10% 8% 11% 11%

Source: SET, AWS estimates

Results Preview 5 Feb 2015

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Key Financial Ratios 2014 2015E 2016E 2017E

Operating Revenue Growth (%) 11.8% 0.5% 9.1% 5.3%

Normalized Profit Growth (%) 19.5% -2.2% 23.3% 6.4%

Gross Profit Margin (%) 36.5% 35.1% 36.5% 12.7%

Operating Profit Margin (%) 12.6% 11.4% 13.0% 32.0%

EBITDA Margin (%) 30.9% 31.8% 32.6% 3.1%

Net Profit Margin (%) 11.3% 11.0% 12.5% 0.0%

Effective tax rate (%) 20.0% 20.0% 20.0% 20.0%

ROA (%) 7.0% 6.9% 8.4% 9.5%

ROE (%) 15.3% 14.6% 17.5% 18.1%

Net Debt to Equity (x) 0.77 0.58 0.52 0.51

EPS (Bt) 1.22 1.34 1.32 1.41

BVPS (Bt) 7.13 7.32 7.51 0.52

DPS (Bt) 1.05 1.10 1.14 1.20

Dividend Payout Ratio 86% 85% 85% 85%

P/E (x) 23.21 21.12 21.37 20.08

P/BV (x) 3.96 3.86 3.76 53.98

EV/EBITDA (x) 10.05 9.73 8.70 85.67

Div. Yield (%) 3.7% 3.9% 4.0% 4.2%

Statement of Financial Position

Unit: Btmn 2014 2015E 2016E 2017E

Operating Revenue 8,623 8,668 9,452 9,957

COGS 5,475 5,626 5,999 6,251

Gross Profit 3,148 3,042 3,453 3,707

SG&A 2,064 2,052 2,229 2,422

Operating Profit 1,084 990 1,224 1,284

EBITDA* 2,667 2,755 3,081 3,241

Tax 271 294 301 313

Interest Expenses 173 154 161 161

Normalized Profit 978 957 1,180 1,255

Nomalized EPS (Bt) 1.10 1.07 1.32 1.41

EPS (Bt) 1.22 1.34 1.32 1.41

* Earning used is net profit (excluding one-off items)

Balance Sheet

Unit: Btmn 2014 2015E 2016E 2017E

Cash & Short-term investments 577 590 715 815

Account Receivable 1,307 1,314 1,433 1,509

Inventory 154 159 169 176

Total Current Assets 2,382 2,339 2,593 2,311

Net PP&E 6,730 6,758 6,696 6,134

Total Non-Current Assets 11,551 11,580 11,519 10,958

Total Assets 13,932 13,918 14,112 13,269

Short-Term Borrowings 2,373 2,173 1,973 1,973

Account Payable 1,899 1,952 2,081 2,168

Total Current Liabilities 4,542 5,195 5,313 4,296

Long-Term Borrowings 2,516 1,668 1,564 1,564

Total Non-Current Liabilities 3,003 2,156 2,053 2,054

Total Liabilities 7,546 7,351 7,366 6,350

Paid-up Capital 890 890 890 890

Capital Surplus 3,968 3,968 3,968 3,968

Retained Earnings 1,111 1,282 1,450 1,641

Total Equity 6,387 6,567 6,746 6,919

Total Liabilities and Equity 13,932 13,918 14,112 13,269

-

Key Assumptions 2014 2015E 2016E 2017E

No. of screens 516 601 651 701

%Concessions / Admission 29 31 30 30

Rentals and services revenue growth (%) 8% 2% 5% 5%

Source: SET, AWS

CG Report

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Corporate Governance Report disclaimer

The disclosure of the survey result of the Thai Institute of Directors

Association (“IOD”) regarding corporate governance is made pursuant

to the policy of the Office of the Securities and Exchange Commission.

The survey of the IOD is based on the information of a company listed

on the Stock Exchange of Thailand and the Market for Alternative

Investment disclosed to the public and able to be accessed by a

general public investor. The result, therefore, is from the perspective of

a third party. It is not an evaluation of operation and is not based on

inside information.

The survey result is as of the date appearing in the Corporate

Governance Report of Thai Listed Companies. As a result, the survey

result may be changed after that date, Asia wealth Securities Company

Limited does not conform nor certify the accuracy of such survey result.

Score Range Number of Logo Description 90 – 100 80 – 89 70 – 79 60 – 69 50 – 59

Below 50

No logo given

Excellent Very Good

Good Satisfactory

Pass N/A

Corporate Governance Report of Thai Listed Companies (CGR). CG Rating by the Thai Institute of Directors Association (IOD) in 2015.

ADVANC BAFS BCP BIGC BTS CK CPN DRT DTAC DTC EASTW EGCO GRAMMYHANA HMPRO INTUCH IRPC IVL KBANK KCE KKP KTB LHBANK LPN MCOT MINTMONO NKI PHOL PPS PS PSL PTT PTTEP PTTGC QTC RATCH ROBINS SAMARTSAMTEL SAT SC SCB SCC SE-ED SIM SNC SPALI THCOM TISCO TKT TMBTOP VGI WACOAL

AAV ACAP AGE AHC AKP AMATA ANAN AOT APCS ARIP BMCL BOL BROOKBWG CENTEL CFRESH CHO CIMBT CM CNT COL CPF CPI CSL DCC DELTADEMCO ECF EE ERW GBX GC GFPT GLOBAL GUNKUL HEMRAJ HOTPOT HYDRO ICCICHI INET IRC KSL KTC LANNA LH LOXLEY LRH MACO MBK MC MEGAMFEC NBC NCH NINE NSI NTV OCC OGC OISHI OTO PAP PDI PEPG PJW PM PPP PR PRANDA PREB PT PTG Q-CON QH RS S&JSABINA SAMCO SCG SEAFCO SFP SIAM SINGER SIS SITHAI SMK SMPC SMT SNPSPI SSF SSI SSSC SST STA STEC SVI SWC SYMC SYNTEC TASCO TBSPTCAP TF TGCI THAI THANA THANI THIP THRE THREL TICON TIP TIPCO TKTKS TMI TMILL TMT TNDT TNITY TNL TOG TPC TPCORP TRC TRU TRUETSC TSTE TSTH TTA TTCL TTW TU TVD TVO TWPC UAC UT UVVNT WAVE WINNER YUASA ZMICOVNT WAVE WINNER YUASA ZMICO

2S AEC AEONTS AF AH AIRA AIT AJ AKR AMANAH AMARIN AP APCOAQUA AS ASIA AUCT AYUD BA BEAUTY BEC BFIT BH BIG BJC BJCHIBKD BTNC CBG CGD CHG CHOW CI CITY CKP CNS CPALL CPL CSCCSP CSS CTW DNA EARTH EASON ECL EFORL ESSO FE FIRE FOCUS FORTHFPI FSMART FSS FVC GCAP GENCO GL GLAND GLOW GOLD GYT HTC HTECHIEC IFEC IFS IHL IRCP ITD JSP JTS JUBILE KASET KBS KCAR KGIKKC KTIS KWC KYE L&E LALIN LHK LIT LIVE LST M MAJOR MAKROMATCH MATI MBKET M-CHAI MFC MILL MJD MK MODERN MOONG MPG MSC MTIMTLS NC NOK NUSA NWR NYT OCEAN PACE PATO PB PCA PCSGH PDGPF PICO PL PLANB PLAT PPM PRG PRIN PSTC PTL PYLON QLT RCIRCL RICHY RML RPC S SALEE SAPPE SAWAD SCCC SCN SCP SEAOIL SIRISKR SMG SOLAR SORKON SPA SPC SPCG SPPT SPVI SRICHA SSC STANLY STPISUC SUSCO SUTHA SYNEX TAE TAKUNI TCC TCCC TCJ TEAM TFD TFI TICTIW TLUXE TMC TMD TOPP TPCH TPIPL TRT TSE TSR UMI UP UPFUPOIC UREKA UWC VIBHA VIH VPO WHA WIN XO

Source: Thai Institute of Directors (IOD)

CG Report

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ระดบ 1ACD AEONTS AFC AIRA AJ ALUCON AMC AQUA ARIP AUCT BAT-3K BIG BJCBLISS BMCL BOL BRR BSBM CBG CCET CCN CGD CMR CPH CSC CSPCTW DCON DRACO DSGT DTCI E EMC ESSO FOCUS FSMART GIFT GLANDGRAND GUNKUL HFT HTECH IHL ILINK ITD JSP KDH KTIS KTP LEE LSTMAJOR MATCH MAX M-CHAI MDX MIDA ML MPIC NC NEP NNCL NWR OHTLPICO PK PL PPM PRAKIT PRECHA PRIN PSTC PYLON RAM RICH RS SANKOSAUCE SAWAD SAWANG SCN SEAFCO SF SHANG SIRI SMART SMM SOLAR SPACK SPGSPPT SPVI STA STAR SVH SVOA SWC TAPAC TC TCCC TCJ TCOAT THTKS TNH TNPC TPA TPAC TPOLY TRC TRUBB TSE TTA TTI TTL TTTMTWP TWZ U UMS UPA UPOIC UTP UVAN VARO VI VIBHA VIH VTEWG

ระดบ 22S ABICO AF AKP AMARIN AMATA AOT APCO AYUD BEAUTY BFIT BH BKDBLAND BTNC CCP CI CSR CSS EFORL EPCO FE FNS FVC GEL GLOBALHEMRAJ IEC IFS INET JUTHA KASET KCAR KKC KSL L&E LALIN LTX MMALEE MBK MBKET MEGA MK MPG MTLS NCH NCL NPP OCC OCEAN PBPCA PRINC QH ROCK RPC S&J SGP SIAM SIS SKR SMG SMIT SORKONSUSCO TAKUNI TEAM TF TIC TIP TIPCO TMC TMI TPP TRT TRU TRUETSC TSI TTW TVD TVO UKEM UNIQ UWC VNG WIIK WIN XO

ระดบ 3AABC ACAP ADVANC AEC AGE AH AIE AMANAH ANAN AP APCS APURE ASASIA ASIAN ASIMAR BIGC BROOK BTS BWG CEN CENTEL CFRESH CHARAN CHO CHOTICM CNT COL CPALL CPF CPI CPL DELTA DEMCO DIMET DNA DTAC EAECF EE EVER FPI GBX GC GFPT GLOW HMPRO HOTPOT ICC ICHI IFECINOX INSURE IRC JAS JTS JUBILE KC KTC KYE LHK LPN LRH MAKROMC MCOT MFC MFEC MINT MJD MONO MOONG NBC NDR NINE NMG NSINTV OGC PACE PCSGH PDI PG PHOL PLAT PPS PR PRANDA PREB PSQLT RATCH RML ROBINS ROJNA RWI SAMCO SCCC SCG SEAOIL SE-ED SENA SINGERSITHAI SMK SMPC SPALI SPC SPCG SPI SRICHA SSI STANLY SUPER SVI SYMCSYNEX SYNTEC TASCO TCMC TFI THAI THRE THREL TICON TKT TLUXE TNL TPCORPTMILL TMT TSTE TSTH TTCL TU TVI UOBKH UREKA VGI VNT WACOAL WHAZMICO

ระดบ 3BAAV AHC AI AIT AKR ARROW ASK BA BDMS BEC BECL BJCHI BUICGH CHG CHOW CIG CITY CK CKP COLOR CWT EARTH EASON EPG F&DFANCY FIRE FMT FORTH GENCO GL GOLD GPSC GRAMMY HYDRO IRCP IT JCTKCM KWC LH LIT LOXLEY MACO MANRIN MATI MODERN MSC NOBLE NOK NPKNUSA OISHI OTO PAF PAP PATO PF PJW PLANB PLE POLAR PRG PTLQ-CON QTC RCI S11 SALEE SAM SAMART SAMTEL SAPPE SC SCP SFP SIMSLP SMT SPA SPORT SSC SST STEC STPI SUC SUTHA T TAE TBSPTCC TFD TGCI TGPRO THANA THIP TIW TK TMW TNDT TOPP TPC TPCHTPIPL TSR TT TYCN UAC UBIS UEC UMI UP UPF UT UV VPOWAVE WINNER YUASA

ระดบ 4ASP BAFS BANPU BAY BBL BKI BLA CIMBT CNS CSL DCC DRT DTCEASTW ECL EGCO ERW FSS GCAP HANA HTC INTUCH IRPC IVL KBANK KCEKGI KKP KTB LANNA LHBANK MTI NKI PSL PTG PTTEP SABINA SCB SNCSNP SSF SSSC TCAP THCOM TISCO TIMB TMD TNITY TOG

ระดบ 5BCP CPN GYT PE PM PPP PT PTT PTTGC SAT SCC THANI TOP

ไมเปดเผยหรอไมมนโยบายA ACC AJD AQ BCH BGT BROCK BSM BTC CHUO CPR CRANE EICFER JMART JMT KAMART KBS KIAT LDC MBAX MCS METCO NEW NEWS NYTPAE PDG PERM PMTA POST RCL RICHY ROH S SIMAT TCB TR TSFTVT WORKหมายเหตระดบ 1 : มนโยบายระดบ 2 : ประกาศเจตนารมณระดบ 3 : มมาตรการปองกน ซงทง 2 กรณ ถอเปนผลการประเมนในระดบเดยวกน

3A : บรษทมการประกาศเจตนารมณเขารวมโครงการ CAC หรอภาค3B : บรษทมค ามน และนโยบายของบรษท แตมไดประกาศเจตนารมณเขารวมโครงการ CAC หรอภาค

ระดบ 4 : ไดรบการรบรองระดบ 5 : ขยายผลสผท เกยวของ

ขอมล Anti-Corruption Progress Indicator ของบรษทจดทะเบยน

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This report has been prepared by Asia Wealth Securities Company Limited (“AWS”). The information herein has been obtained from sources believed to be reliable and accurate, but AWS makes no representation as to the accuracy and completeness of such information. AWS does not accept any liability for any loss or damage of any kind arising out of the use of such information or opinions in this report. Before making your own independent decision to invest or enter into transaction, investors should study this report carefully and should review information relating. All rights are reserved. This report may not be reproduced, distributed or published by any person in any manner for any purpose without permission of AWS. Investment in securities has risks. Investors are advised to consider carefully before making decisions.

Branch Address Phone Fax

Head Office 540 Floor 7,14,17 , Mercury Tower, Ploenchit Road, Lumphini,

Pathumwan Bangkok 10330

02-680-5000 02-680-5111

Silom 191 Silom Complex Building,21st Floor Room 2,3-1 Silom Rd.,

Silom, Bangrak, Bangkok, 10500 Thailand

02-630-3500 02-630-3530-1

Asok 159 Sermmitr Tower, 17th FL. Room No.1703, Sukhumvit 21

Road, Klong Toey Nua, Wattana, Bangkok 10110

02-261-1314-21 02-261-1328

Pinklao

7/3 Central Plaza Pinklao Office Building Tower B, 16th Flr., Room

No.1605-1606 Baromrajachonnanee Road, Arunamarin,

Bangkoknoi, Bangkok 10700

02-884-7333 02-884-7357,

02-884-7367

Chaengwattana

99/99 Moo 2 Central Plaza Chaengwattana Office Tower, 22nd Flr.,

Room 2204 Chaengwattana Road, Bang Talad, Pakkred,

Nonthaburi 11120

02-119-2300 02-8353014

Chaengwattana 2

9/99 Moo 2 Central Plaza Chaengwattana Office Tower, 22nd Flr.,

Room 2203 Chaengwattana Road, Bang Talad, Pakkred,

Nonthaburi 11120

02-119-2388 02-119-2399

Mega Bangna 39 Moo6 Megabangna, 1st Flr., Room 1632/7 Bangna-Trad Road,

Bangkaew Bangplee, Samutprakarn 10540

02-106-7345 02-105-2070

Rayong 356/18 Sukhumvit Road, Nuen-Phra Sub District, Muang District,

Rayong Province 21000

038-808200 038-807200

Khonkaen 26/9 Srijanmai Road, Tamboonnaimuang, Khon Khaen

40000

043-334-700 043-334-799

Chonburi 44 Vachiraprakarn Road, Bangplasoi, Muang Chonburi, Chonburi

20000

038-274-533 038-275-168

Chaseongsao 233-233/2 Moo2 1st Flr., Sukprayoon Road, Na Meung Sub-

District, Meung District, Chachoengsao 24000

038-981-587 038-981-591