RHB Group Research analyst Jarick Seet has kept a “neutral” rating on UnUsUaL with an unchanged target price of 14 cents.
With the resumption of the group’s business following a long hiatus due to the pandemic, Seet believes that the worst is over for UnUsUal. He says: “We expect the group to return to profitability in FY2023 ending March and see stronger growth in the years ahead. However, as its valuation remains rich at this point, we maintain our call, for now.”
UnUsUal’s core business is finally operational after a long period of stasis due to Covid-19. This is thanks to the Singapore government easing Covid-19 measures and thereby approving the return of live performances, while further lifting capacity limitations as at end-April.
“The relaxation of measures will greatly benefit UnUsUaL, since mass entertainment events comprises its core business, and Singapore remains one of its core markets,” adds Seet.
Hence, the group has several concerts in the pipeline featuring artists like Eric Chou and, potentially, JJ-Lin, following the A-Lin concert on May 28.
Seet’s channel checks also revealed that large venues like the Singapore Indoor Stadium and Singapore National Stadium have been packed with bookings for the rest of the year, signalling a steady flow of upcoming events.
See also: Test debug host entity
Moreover, after the conclusion of A-Lin’s concert, UnUsUaL announced the return of Eric Chou’s Odyssey Journey concert slated for Sept 10-11, where tickets for Sept 10 are sold out, and the uptake for Sept 11 is strong as well.
“We expect the group to organise more concerts in its pipeline including the possibility of securing JJ Lin, which will be a huge boost for its profitability due to the larger scale of his concerts which are likely to be held at the Singapore National Stadium,” writes the analyst.
In addition, Seet expects UnUsUal to start hosting concerts overseas, in countries such as Malaysia and Australia.
See also: Maybank downgrades ComfortDelGro in contrarian call over Addison Lee acquisition worries
Overall, while profitability is expected in the near term, the analyst sees the stock’s valuation as expensive, but expects this situation to better improve in FY2024 to FY2025, provided it secures more concerts locally and overseas.
As such, Seet prefers to wait for more significant catalysts before revisiting his valuation.
As at 10.45am, shares in UnUsUaL are trading flat at 14 cents at an FY2023 P/B ratio of 2.9x.
Photo: Samuel Isaac Chua
