Spackman

Spackman: Swung into a 3Q14 net loss of US$5.0m, from a net profit of US$4.3m a year ago. Revenue shrank 66% y/y to US$3.6m, mainly due to the absence of production revenue and share of profit from the film production Cold Eyes. Meanwhile, cost of sales remained unchanged, and bottom line was dragged by IPO expenses and increased headcount. Nevertheless, management expects the current long winter holiday for students in Korea to be a strong season for film admissions. As a catalyst, its subsidiary, Opus Pictures, is scheduled to release the film, Big Match on 27 Nov. Separately, the group proposed to acquire 51% or more of Novus Mediacorp - an investor, presenter and ancillary distributor for 54 Korean theatrical films since 2009. Novus' wholly-owned subsidiary, Novus Entertainment, is currently producing three major films for release in 2015- Life Risking Love, Chong Hee - The Emperor's Love and Korean Gangster. At $0.25, Spackman trades at a trailing 24.7x P/E and 4.1x P/B.