GHY Culture & Media - DBS Research 2023-03-15: FY22 Results Below Expectations; Anticipate A Turnaround In FY23

• GHY Culture & Media (SGX:XJB) held its FY22 results briefing yesterday. Post the briefing, we slashed our FY23F/24F earnings estimate for GHY Culture & Media by 70%-80%, as we cut our assumption on the number of projects, especially for the TV programme and film production segment.
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GHY Culture & Media's FY22 Results Highlights

FY22 results below expectations.

• GHY Culture & Media reported FY22 net loss of S$9.4m on the back of a 45% decline in revenue to S$45.7m. For 2H22, the group reported net loss of S$8.0m while revenue dropped 36% y-o-y (+22% h-o-h).
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• The overall net loss was mainly due to:
  1. A foreign exchange loss of about S$8.8m arising from the appreciation of the Singapore dollar against the Chinese renminbi in FY2022, as GHY Culture & Media has significant operations in the PRC; and
  2. Delays in signing contracts with some customers under the TV programme and film production business segment due to the heightened COVID-19 measures in the PRC that began in March 2022 and continued until November 2022. While key terms may have been agreed upon in principle with customers, contract signing and production with some of the customers were delayed due to the heightened COVID-19 measures in the PRC during FY22, which presented challenges in finalising these contracts.
• A dividend of S$0.001 has been proposed despite a loss position in FY22. See GHY Culture & Media's dividend date.

Outlook

Concert resumption and China re-opening are positive developments.

• Read more at SGinvestors.io.

Lee Keng LING DBS Group Research | https://www.dbs.com/insightsdirect/ 2023-03-15 SGinvestors.io

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