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MAYBANK KIM ENG |
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Vividthree Holdings (VTH SP) Transforming Into A Scalable Content Producer
Vividthree is transforming from a post-production provider into a digital content producer, with the new segment contributing 60% of FY18 net profit. It should benefit from the rising penetration of VR, having recently secured the rights to develop a VR thematic tour show for a popular film. If executed well, the VR tour will be highly profitable and transform Vividthree’s business model into a highly scalable one which it could grow with more recurring royalty income and IPs. For each VR set, Vividthree expects S$1.0m-1.5m net profit (37-56% of FY18 net profit).
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StarHub (STH SP) Delivering On Restructuring
Unveils restructuring savings; maintain BUY StarHub has unveiled manpower- and other cost-restructuring moves to prepare for future competition and industry trends. We raise our 2019- 20E core EPS and DCF-based (WACC 5.7%, LTG -1%) TP by 11-15% and 13%, respectively. Maintain BUY based on these catalysts. Worse-thanexpected wireless competition is a key risk to our outlook.
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Jumbo Group Limited In rapid regional expansion mode
■ JUMBO is rapidly expanding into new cities in Asia and plans to open more JUMBO Seafood franchise outlets over the next four years. ■ Operating cost per sq ft of restaurant space was down 16.5% qoq in 3QFY18 due to cost optimisation efforts, which could lead to margin uplift in future. ■ We think JUMBO’s net profit will trough in FY18F, before strong recovery in FY19F. Maintain Add with lower TP of S$0.58 after adjusting cost estimates.
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