KUALA LUMPUR: UOB KayHian has maintained its Buy call on Cityneon Holdings Ltd, with the potential for earnings surprises.
During a recent marketing trip to Singapore, investors gave positive feedback on Cityneon, citing management foresight and explosive growth potential through the Victory Hill Exhibition (VHE) acquisition.
The Singapore-listed company, which is a subsidiary of Star Media Group, is said to be poised to ride the wave of success of the Avengers and Transformers blockbuster movie titles.
“The VHE business segment looked interesting to investors, given: the high barriers to entry in the form of agreements with Marvel Entertainment and Hasbro Inc, and VHE’s advanced technical know-how in creating immersive experiences,” said UOB on Thursday.
Cityneon opened the Avengers S.T.A.T.I.O.N. attraction at Esplanade de La Défense in Paris France on April 15, 2016, which is slated to run until Sept 25, 2016. The research house believes that has surpassed expectations, partly due to the school holiday spring break in Paris, Versailles, Toulouse and Montpellier as well as the release of Marvel’s Captain America: Civil War.
In June last year, Global Experience Specialists (GES) which owns the rights to Harry Potter: The Exhibition, reported that the Paris exhibit attracted more than 200,000 guests in just two months, which translates to about 3,300 guests per day.
If the Avengers S.T.A.T.I.O.N. Paris follows the same trend, it could see excess of 400,000 visitors over the five-month stretch.
Cityneon has indicated it is in talks about the naming rights to the Las Vegas property that will house the Avengers S.T.A.T.I.O.N. and Transformers Experience exhibits. UOB sees the finalisation of naming rights for the Las Vegas property and securing of additional intellectual property rights as potential catalysts.
The research house maintains its Buy call on Cityneon with a conservative PE-based target price of S$0.72.
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