mm2 Asia: 1HFY16 net profit expanded 30% to $4m, in line with a 31% increase in revenue to $12.7m, from the consolidation of a new subsidiary acquired during the year, and from existing core business.
Gross margin improved 7.4ppt to 66.1%, largely driven by the new subsidiary.
Growth in gross margin was largely offset by a surge in administrative expenses nearly tripled to $3m, from increased staff costs, professional fees and other non-recurring activities.
Going forward, the recently acquired Cathay Cineplexes should generate income from 3Q onwards. Meanwhile, mm2 Asia expects to complete the acquisition of 3 other cinemas in 4Q.
mm2 Asia is currently trading at 38.5x annualized 1HFY16 P/E.
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