mm2 Asia

mm2 Asia: Lacklustre trading debut for the local film producer today, opening at $0.275- 10% above its offering price of $0.25/share, before falling to the current $0.22 (-12%). The 37.4m shares (31m new shares, 6.4m vendor shares) were fully placed out by Hong Leong Finance, which raised $7.3m in net proceeds, intended for business expansion (41%), investment in production activities and working capital (29.5% each). mm2 Asia is a producer of movies and TV/online content, with a presence in Malaysia, Hong Kong, Taiwan and China. To support its future growth, the company believes the demand for locally-produced content in Singapore and Malaysia is strong, backed by the box office successes of 'Ah Boys to Men' series and 'The Journey'. In addition, the rising trend of box office receipts, buoyed by an increase in demand for movies, is expected to support revenue growth going forward. At $0.22, mm2 Asia has a market cap of $45.5m. Valuation wise, the counter trades at 16.6x FY14 P/E and 3x P/B, cheaper than South Korean film producer/distributor Spackman Entertainment of 23.3x P/E and 7x P/B.