SINGAPORE (Aug 31): CIMB is maintaining its “add” on Cityneon with target price of $1.27 after the group announced the acquisition of JP Exhibition which holds global rights to the Jurassic World travelling exhibition.
In 2016, Jurassic World: The Exhibition made a six-month stay at the Melbourne Museum, welcoming over 430,000 visitors at an average ticket price of US$25. It was the museum's most popular attraction since 2011’s Tutankhamun show, according to the local Australian newspapers.
This travelling exhibition made its next stop in Philadelphia, recording total visitorship of more than 400,000 people at an average ticket price of US$35 at the Franklin Institute. The temporary set has since relocated to the Field Museum in Chicago, and will be there till Jan 2018.
“We understand there are two more locations in the pipeline for 2018, and plans to build a 2nd immersive experience set are underway,” says CIMB analyst Ngoh Yi Sin in a Thursday report.
Travelling exhibitions are also often favoured by property management companies, who need diverse sources of content as a means of pulling the crowd into their locations, adds Ngoh.
Cityneon acquired JP Exhibition via its wholly-owned subsidiary Victory Hill Exhibitions (VHE) for US$25 million ($33.8 million) from a group of vendors including Imagine Exhibitions.
The deal also comes with a profit target of US$5 million for the 12-month period ending Jan 7, implying 12-month forward P/E of 5x.
“We think this is attractive, vs. Cityneon’s current valuation of 11.9x and the industry average of 15.8x. This IP also ties in with the family-oriented theme for Cityneon,” says Ngoh.
Based on statistics from Box Office Mojo, Jurassic World (2015) is the 4th highest grossing box office worldwide all-time. Its sequel, Jurassic World (Fallen Kingdom), is slated for 2018 summer.
Jurassic World is VHE’s 3rd IP acquisition associated with blockbuster movies after Disney’s Marvel Avengers S.T.A.T.I.O.N. and Hasbro’s Transformers Autobot Alliance, but it marks the start of a partnership with Universal Studios, which may include a majority stake investment in related travelling sets for the 25th anniversary of Jurassic Park.
“We see travelling sets as an extension of movie blockbusters, in terms of reaching out to loyal fans and enhancing the overall film franchise, by the production studios (Universal Studios, Disney, Hasbro) which also participate actively in quality control and the sourcing of local partners in the various countries the sets go to,” says Ngoh.
“We keep our FY17-19 forecasts and target price of $1.27 (pegged to 15x FY18F P/E, 15% discount to peers’ average) intact. Maintain Add,” adds the analyst.
As at 10.21am, shares in Cityneon down 2 cents at 99 cents.
