February 24th, 2022 | 10:23 CET
Lufthansa, mm2 Asia, BioNTech - Clear the way for the rebound
Table of contents:
The resurrection of an industry
If you use Facebook, the slogan "Culture isn't everything, but without culture, everything is nothing" came across your timeline in the last two years. The event industry was one of the hardest-hit industries due to closures and restrictions due to the Corona pandemic. No concerts could take place, theaters and cinemas were closed. Companies in the affected industries literally had their feet pulled out from under them overnight. In Germany, special funds were set up, and the Corona support partially prevented companies from closing overnight. Listed companies from Germany, such as CTS Eventim, halved in value in the initial phase of the pandemic but have gradually recovered to date and are already trading at pre-Corona levels.
Great rebound opportunity in Singapore
In other countries, or much more so on other continents, government aid was less forthcoming, which is why share price recoveries have so far failed to materialize. The example of the Singapore-based company mm2 Asia shows the great rebound potential in this sector. The Company is listed both on the main board of the Singapore Exchange and in Frankfurt at EUR 0.029 and currently has a market capitalization of EUR 77.69 million. Since the outbreak of the pandemic, the share has lost nearly 79% of its value but is now facing a strong rebound in its business following the global openings.
At the same time, mm2 Asia is all about content. The business is divided into several sub-segments: Its core business is post-production and creation, distribution and sponsorship of content. The acquisition of a majority stake in the award-winning virtual reality, visual effects and computer-generated imagery studio, Vividthree Holdings, and an event production and concert promotion company, UnUsUaL Limited, gives it a clear competitive advantage over its peer group in this area. With the establishment of mmCineplexes and the acquisition of Cathay Cineplexes Pte Ltd, mm2 Asia is also one of the most important cinema operators in Malaysia and Singapore. In addition to the restarting cinema operations, the event production and concert promotion segment also has enormous rebound potential. Up until 2019, the Company had shone for years with rising curves in revenue and profitability. Revenue in 2019 was EUR 174.66 million, while gross profit came in at EUR 81.49 million.
Analysts see potential
In a report, analyst firm UOB Kay Hian expects significantly rising earnings in fiscal 2022, driven by all segments. An expected recovery in movie attendance should occur, especially as the majority of the population in Singapore and Malaysia is vaccinated. In addition, experts see a solid pipeline of core production business of EUR 98.42 million to EUR 124.67 million in the next 2-3 years and the resumption of personal concerts. Fantasy should come from the planned launch of MetaViva, an NFT marketplace. The analysts set the price target at SGD 0.115, equivalent to EUR 0.075.
Pause for the crane
The Lufthansa share has been recovering since mid-December of last year. From the low of EUR 5.50, it went up until the closing of the price gap at EUR 7.90. Now the airline has been brought to an abrupt halt. The reason is the Ukraine conflict and an imminent threat of war. Thus, Lufthansa stopped air traffic between Germany and the Ukrainian airports in Kiev and Odesa.
However, the city of Lviv, located further to the west, will continue to be served by regular flights. Flights to and from Kiev and Odesa will not be suspended immediately, with flights still scheduled on Sunday "to allow people to leave Ukraine." There will be no more flights to the crisis region until the end of February. How it will continue after that, the crane airline leaves open. It is monitoring the situation and will "decide on further flights at a later date," the Handelsblatt quotes. Given the uncertainties, investors should also suspend the Lufthansa share for the time being after the increase.
From a chart perspective, the shares of vaccine manufacturer BioNTech also continue to be hit hard. After the breakout at EUR 150.00, the next support area at around EUR 120.00 could be tested. While BioNTech continues to be in negative territory, its partner Medigene exploded by almost 100% after the cooperation announcement with the Mainz-based company.
Together, the two companies want to develop a cancer therapy over a three-year period. "This further expands our leading position in the fast-growing field of cell therapies," said Ugur Sahin, chief executive and co-founder of BioNTech. Under the terms of the collaboration, Medigene will receive an upfront payment of EUR 26 million and reimbursement of research costs. BioNTech is responsible for global development and will receive exclusive worldwide commercialization rights for the so-called TCR therapies.
The post-pandemic openings promise enormous rebound potential, especially in the culture and events industry. In Singapore, mm2 Asia could gradually erase its share price losses of recent years. With Lufthansa and BioNTech, watching from the sidelines is recommended.
Conflict of interest
Pursuant to §85 of the German Securities Trading Act (WpHG), we point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH (hereinafter referred to as "Relevant Persons") may hold shares or other financial instruments of the aforementioned companies in the future or may bet on rising or falling prices and thus a conflict of interest may arise in the future. The Relevant Persons reserve the right to buy or sell shares or other financial instruments of the Company at any time (hereinafter each a "Transaction"). Transactions may, under certain circumstances, influence the respective price of the shares or other financial instruments of the Company.
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