Singapore’s Big Winner for the Week: mm2 Asia Ltd

Shares of mm2 Asia Ltd (SGX: 41C) have climbed by 10.9% from last Friday to close at S$0.305 yesterday.

This makes mm2 a big winner in our local market this week as Singapore’s market barometer, the Straits Times Index (SGX: ^STI), actually lost 0.6% over the same time frame.

mm2, which listed at the end of last year, is a media company that was started in 2008 to “create Asian content for international audiences.” It is headquartered in our country and has offices in Malaysia and Hong Kong. It also has business partnerships in China. mm2 has co-produced and/or distributed more than 20 movies and some of the more famous local films include 23:59 and the Ah Boys To Men series.

Earlier this month, the firm announced that it has entered into an agreement to purchase a 51% stake in Vividthree Productions Pte Ltd for S$3.06 million. Vividthree is a “leading player in Singapore’s three-dimensional (“3D”) animation field, specialising in 3D stereoscopic animation, 3D animation and visual effects for feature films and commercials.” It is also involved in film production and content development.

With the proposed acquisition, mm2 will be able to “diversify and expand into complementary business areas within the film production value chain.” mm2’s management also believes that the acquisition will help the company tap into new markets and clients with the addition of 3D animation capabilities.

Talking about expansion, mm2 sealed another deal at the end of March – this time an agreement with Grand Olympus Films (International) Limited, a Chinese film company, and JTeam Productions Pte Ltd., a Singapore movie producer, to co-produce a movie that goes by the working title of Game Kids.

The new movie is to be distributed mainly in China. JTeam is the brainchild of movie director, Jack Neo, who is also the man behind the Ah Boys To Men series.

Melvin Ang, Chief Executive Officer of mm2, commented on the new partnerships:

“We are very excited about this co-production and are confident that Game Kids, with its winning formula and universal themes, will engage audiences in the PRC, which is one of the key markets that mm2 Asia is targeting to expand our presence to. mm2 Asia is also honoured to partner with Grand Olympus and J Team in this co-production. With their team of industry veterans and professionals and their impressive track record and strong connections in the PRC, we know we are in good hands.”

The media outfit is currently trading at 23 times its historical earnings.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.