March 25th, 2022 | 10:03 CET
Now is the hour for endemic stocks: Weng Fine Art, MM2 Asia, Netflix
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At home in Southern Germany, the passionate stock exchange expert has been accompanying the capital markets for about twenty years. With a soft spot for smaller companies, he is constantly on the lookout for exciting investment stories.
Weng Fine Art: Art! Virtual and true!
March 2020 will go down in history as a turning point: We all switched to the private sphere, retreating to the webcam at home. The pandemic ushered in a new era and made gatherings in cyberspace the new norm. Many people currently feel the urge to make up for the past years: Restaurants are full, even formerly hated industry trade shows now have a certain magic about them - we are meeting people again after years. Most people now look forward to real-life events again. But the experiences gained during the pandemic remain and could lead to virtual worlds and real events merging more and more. Even today, physical discussion rounds with connected participants are commonplace. But even formerly physical industries are becoming increasingly virtual - like the art market. During the pandemic, NFTs experienced a lot of hype. NFTs are tokens that are unique and securitize virtual goods, fractionalized artwork, or other rights. These can be virtual fashion worn by our avatars in virtual worlds as well as legally watertight shares in valuable works of art that offer a meet and greet with artists or other benefits for good measure.
For years, the German Company Weng Fine Art has been considered a successful trading house around art and its editions. For some months now, Weng Fine Art has also been active around NFTs and has caused a sensation with its investment in 360X Art AG, in which Deutsche Börse and Commerzbank are also shareholders. Weng Fine Art has supported several NFT projects in recent months and successfully placed them with investors and art fans. The Company also holds, among others, the e-commerce subsidiary ArtXX AG from Switzerland and a 25% stake in Artnet AG. Recently, the share price of Weng Fine Art came back a little for the first time after years of rapid growth. Given the many opportunities inherent in the Company, this could be an opportunity.
MM2 Asia: The cinemas are filling up again
MM2 Asia from Singapore could also offer an opportunity. The Company produces films and infotainment content and is thus benefiting from the comeback of the entertainment industry. Cinemas and concert halls are reopening in Singapore and Malaysia, where MM2 Asia does business. Since MM2 Asia not only produces films but also operates cinemas, the Company is benefiting twice from the openings. Since Hollywood has also postponed some blockbusters and people are pushing more and more back into the thriving life outside their own four walls, the content should convince potential cinema-goers. Most recently, the Company announced the launch of its own NFT platform.
Analysts at UOB Kay Hian recently raised their price target on MM2 Asia's stock from SGD 0.095 to SGD 0.115. This year, losses are expected to decrease significantly, and next year the turnaround will be achieved. According to analysts, operating cash flow is expected to increase from SGD 3.9 million to SGD 43.3 million already this year. In view of the post-Covid comeback, MM2 Asia's stock should also be able to benefit. The extent to which the new NFT platform, which aims to specialize in media content from Asia, can soon make a positive contribution to the figures remains to be seen. However, Asians are considered to be open-minded towards the metaverse. MM2 Asia's focus could fill a niche that promises exclusivity.
Netflix: Fighting the decline
While companies like MM2 Asia and Weng Fine Art are establishing a business model between thriving and virtual worlds, Netflix remains a typical couch potato stock. While it is hard to imagine living rooms without the streaming service, streaming content is far from a no-brainer, especially during the northern hemisphere summer. Although the Company is currently taking action against users who share an account, the repression could backfire, especially in view of the impending endemic disease - it cannot be ruled out that Netflix users will prefer to go to the movies in the future after years of watching TV at home. The plans for ad-supported subscriptions also seem like an act of desperation.
Even if Netflix is an offering that persists, the growth curve could still get a bend. The situation is different for companies like Weng Fine Art and MM2 Asia. Here, there is great imagination given the impending endemic. NFTs, in particular, have the potential to bridge the gap between real and virtual worlds.
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") currently hold or hold shares or other financial instruments of the aforementioned companies and speculate on their price developments. In this respect, they intend to sell or acquire shares or other financial instruments of the companies (hereinafter each referred to as a "Transaction"). Transactions may thereby influence the respective price of the shares or other financial instruments of the Company.
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