Spackman

Spackman: 2Q14 booked net loss of US$0.5m, while revenue rose 10x to US$4.8m, from “For the Emperor”, “Confession” and “My Brilliant Life” films. Meanwhile, cost of sales swelled to US$4.3m from a low base due to production, print and advertising costs of the said films. Bottom line was also impacted by increased general expenses from increased headcount, offset by lower impairment losses on goodwill. Spackman guides that as at late Aug, overall Korean box office revenues were flat due to 1) high base from 2013, 2) Brazil World Cup, 3) films were quietly released in respect of the Sewol Ferry sinking and 4) an abnormally higher number of Hollywood blockbuster films. That said, with no major Hollywood movie planned for release in the Korean market for the remainder of the year, Korean films market share should regain market share. Spackman is currently trading at 9x P/B.