Portfolio Manager/Head of Equity Investment, Tandem Investors Limited

Jason Oh

Portfolio Manager/Head of Equity Investment

Tandem Investors Limited

Equity Bottom-Up

Increase the weight in Asia Pacific model portfolio from 2.7% to 4.3% We increased the weight of <a href="https://www.smartkarma.com/entities/2885" target="_blank" data-smartkarma-citation="entities:2885:1">Cj Cgv Co Ltd (079160 KS)</a> in our Asia Pacific long-short model portfolio from 2.7% to 4.3% due to the followings; 1) The company's market share in China is on the rise backed by the successful penetration into 2nd and 3rd cities, while the nationwide B/O (box office) numbers are shrinking, 2) The Turkish business, acquired in Apr 2016, is likely to turnaround, given the high M/S over 40% and strong seasonality  of Turkish market, 3) Our quantitative technical score, TTS(Tandem Technical Score: more information below) is 1.09, implying that the share price is likely to rebound before long.Gaining M/S while China's negative growth is meaningful achievement The company's market share in China B/O is growing to 2.9% (ranked 7th) in 3Q16, which has been growing from below 1% and 20th since 2006. Particularly, the company's direct affiliates mainly in 2nd-3rd tier cities in China are turning black from last year's c. USD10mn deficit. Businesses in 1st tier cities are by JV with local companies and already making money due to prime location. Given the sluggish launching of the blockbuster premieres in 2016, we believe the company will show the meaningful earnings growth in 2017 in China business.Disappointing 3Q16 results were due to one-off cost from Turkey business and already priced-in The company announced the acquisition of No.1 multiplex company (M/S of 42%), Mars Entertainment Group, in Apr 2016. However, the company made a big loss over KRW 13bn in 3Q16 from the acquisition such as financial cost and one-off cost related to the acquisition. After the announce of the acquisition, the share price continues to slide down by c.50% for the past 6 months. We believe now the negatives are fully priced-in and Turkey business will show a strong earnings rebound in 4Q16, due to seasonal effect, high M/S in the market, and lowered interest rate resulting from the refinancing of the debts.

Increase the weight in Asia Pacific model portfolio from 2.7% to 4.3% We increased the weight of Cj Cgv Co Ltd (079160 KS) in our Asia Pacific long-short model portfolio from 2.7% to 4.3% due to the followings; 1) The company's market share in China is on the rise backed by the successful penetration into 2nd and 3rd cities, while the nationwide B/O (box office) numbers are shrinking, 2) The Turkish business, acquired in Apr 2016, is likely to turnaround, given the high M/S over 40% and strong seasonality  of Turkish market, 3) Our quantitative technical score, TTS(Tandem Technical Score: more information below) is 1.09, implying that the share price is likely to rebound before long.Gaining M/S while China's negative growth is meaningful achievement The company's market share in China B/O is growing to 2.9% (ranked 7th) in 3Q16, which has been growing from below 1% and 20th since 2006. Particularly, the company's direct affiliates mainly in 2nd-3rd tier cities in China are turning black from last year's c. USD10mn deficit. Businesses in 1st tier cities are by JV with local companies and already making money due to prime location. Given the sluggish launching of the blockbuster premieres in 2016, we believe the company will show the meaningful earnings growth in 2017 in China business.Disappointing 3Q16 results were due to one-off cost from Turkey business and already priced-in The company announced the acquisition of No.1 multiplex company (M/S of 42%), Mars Entertainment Group, in Apr 2016. However, the company made a big loss over KRW 13bn in 3Q16 from the acquisition such as financial cost and one-off cost related to the acquisition. After the announce of the acquisition, the share price continues to slide down by c.50% for the past 6 months. We believe now the negatives are fully priced-in and Turkey business will show a strong earnings rebound in 4Q16, due to seasonal effect, high M/S in the market, and lowered interest rate resulting from the refinancing of the debts. 

CJ CGV: Preparing for Blooming During Snowy Winter

United States

Cinemark Holdings, Inc. operates movie theaters.  The Company operates in the United States and Latin America.

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Cinemark Holdings (CNK US)

CJ CGV: Preparing for Blooming During Snowy Winter

Increase the weight in Asia Pacific model portfolio from 2.7% to 4.3% We increased the weight of Cj Cgv Co Ltd (079160 KS) in our Asia Pacific...

Jason Oh

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