UnUsUaL - RHB Invest 2020-02-12: Down Temporarily Due To Novel Coronavirus; BUY


UnUsUaL - Down Temporarily Due To Novel Coronavirus; BUY

  • With the novel coronavirus impacting Asia quite significantly, large scale events have also been negatively impacted. UnUsUaL (SGX:1D1) has postponed the JJ Lin Australia & Hong Kong concerts and we expect its other concerts in Asia to also be postponed.
  • Management is likely to shift its focus to more Western markets like the US for the rest of 2020, which will help to alleviate concerns of its pipeline being affected.

Expanding to more family entertainment titles and targeting the US market.

  • We expect the company to secure more new concerts with renowned Cantopop artists for 2020, as well as well-known family entertainment shows to further build on its 2020 pipeline. Historically, on its family entertainment side, UnUsUaL has worked with Disney for multiple projects and presented 48 Disney on Ice shows in South Korea and Taiwan.
  • We believe that UnUsUaL will continue to expand its scope with Disney to promote more of their titles in Asia, especially in 2021. We also expect the company to continue exploring tie-ups and JVs to further expand its concert business globally, especially in the western markets and focus less on Asia to reduce the concentration risk of the novel coronavirus.

Stronger 3Q ahead but weaker 4Q.

  • 3QFY20F (Mar) should see revenue from a 2-night concert of JJ Lin at a much larger national stadium venue – 4x the capacity of his 2018 concert, which has been fully sold-out as well as its Eric Chou concert to boost performance for its upcoming 3QFY20F results. However, we think that its 4QFY20F will likely be impacted by the postponement of a few concerts like its JJ-Lin’s Australia and Hong Kong shows which will result in a loss of income during that quarter, mainly due to the Hong Kong protests as well as the novel coronavirus.

A temporary dip but long term business prospects remain intact.

  • All in all, we expect the postponement of concerts to result in FY20F-21F to be cut by 23% & 23% respectively. As a result, our Target Price is also lowered. However, we think that these setbacks are just temporary and the long term demand for concerts will continue to rise after the virus outbreak settles. This may represent an opportunity for investors to collect at a more attractive price level for the longer term holding. As a result, we maintain BUY.
  • See UnUsUaL Share Price; UnUsUaL Target Price; UnUsUaL Analyst Reports; UnUsUaL Dividend History; UnUsUaL Announcements; UnUsUaL Latest News.
  • Key risks include cancellation/postponement of concerts, accidents, and departure of key employees.

Shekhar Jaiswal RHB Securities Research | https://www.rhbinvest.com.sg/ 2020-02-12
SGX Stock Analyst Report BUY MAINTAIN BUY 0.38 DOWN 0.420