mm2 Asia cut to ‘hold’ by CIMB on limited upside

SINGAPORE (June 13): CIMB has downgraded mm2 Asia from “add” to “hold” following the entertainment company’s proposal to spin off its 51%-owned subsidiary, UnUsUal, which organises trade shows, events and concerts. The target price of 73 cents remains.

The company was acquired by mm2 Asia only back in February this year for $26 million in a mix of cash and shares. With a net profit target of $5 million, the purchase price implies a forward PE of 10.2 times.

“We viewed the acquisition positively, as it could offer synergies for mm2 Asia’s core business of content production,” state CIMB analysts Ngoh Yi Sin and William Tng in their June 12 note.

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