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MM2 Asia Ltd’s Shares Are Trading Close to Their 12-Month Low. Is It Cheap Now?

MM2 Asia Ltd (SGX: 1B0) is a content and media company. It has businesses in the production and distribution of film, TV and online content, post-production, cinema operation, event production, and concert promotion in Singapore, Malaysia, Hong Kong, Taiwan, China, and the U.S.

At their current price of S$0.27 (at the time of writing), MM2 Asia’s shares are trading at $S0.01 above their 52-week low of S$0.26. Is MM2 Asia cheap now? If shares are cheap, it might be a good opportunity for investors.

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There is no easy answer, but we can get some insight by comparing MM2 Asia’s current valuation with the market’s valuation. We’ll use three common valuation metrics: the price-to-book (P/B) ratio, the price-to-earnings (P/E) ratio, and the dividend yield.

I will be using the SPDR STI ETF (SGX: ES3) as a proxy for the market; the SPDR STI ETF is an exchange-traded fund that tracks the fundamentals of Singapore’s stock market benchmark, the Straits Times Index (SGX: ^STI).

MM2 Asia currently has a P/B ratio of 1.5, which is higher than the SPDR STI ETF’s P/B ratio of 1.2. Also, its P/E ratio is higher than that of the SPDR STI ETF’s (13.8 vs. 13.0).

Keep in mind, though, that the company hasn’t pay a dividend in recent years, so dividend yield is not really a relevant metric for this exercise.

MM2 Asia looks to be priced at a slight premium to the market average due to its high P/B ratio and high P/E ratio. Moreover, income investors might find the company an unsuitable investment since it has not paid a dividend in recent years.

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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 Lawrence Nga doesn’t own shares in any companies mentioned.