Enlarge Your Pie
Recently while using the SGX's Stockfacts, I just realised there are actually film productions companies listed in it.
There is one that caught my eyes - mm2 Asia Ltd (Another is Alibaba Pictures Group Limited - but it's a China related HK company. So it's out.)
As per SGX, "mm2 Asia Ltd. produces movies and TV/online content in Singapore, Malaysia, Hong Kong, Taiwan, and the People’s Republic of China. It also distributes third party movies. The company was founded in 2008 and is headquartered in Singapore."
Due to its role as a production house for "Ah Boys to Men 3" and a LKY related film, as well as various news report on the net, mm2 Asia Ltd has almost doubled it's IPO price.
However, I feel that this rise in share price is due to recent hype. The reason being movie productions is a trial and error business. You never know when your next film is a box office or a flop. Not any movie is an "Avenagers" or "Ah Boys to Men". Furthermore cost is an issue when it comes to big productions.
"Movies" being the END-product is dependent on consumer taste and preferences. It cannot guarantee a consistent stream of net income for the investor and thus no guarantee of dividend. But if you look deeper, these END-products that will have a service supporter (in my own words - a service or that is created due to the END-Product) or a component of these END-product.
End-product gets created > A Service supporter is created or existing service supporter gain more revenue > End-product gets popular > Component companies gain more revenue > Other Brands Comes in to create similar End-product > Component companies get even more business > Service Supporter has constant stream of revenue.
In the above cycle, the END-product company may lose market share but Service Supporter Company and the Components company will gain businesses instead.
Thus, if mm2 Asia Ltd is producing movies (END-product), I will rather invest in Golden Village (Service Supporter) instead. However, Golden Village is not listed. An option is invest in its parent companies - it is 50:50 joint venture by Golden Harvest of Hong Kong and Village Roadshow of Australia.
Another example is Eurosports Global Ltd - a retailer of Mazda Cars in Singapore. However I rather invest in Wilson Parking (Service Supporter) than to invest in Eurosports Global Ltd. Once again, Wilson Parking is not listed. Another Car Park management that is listed is LHN Group Limited (Please do your due diligence if you intend to invest).
Hope you understand and like what I wrote here - Enlarge Your Pie by investing in a service supporter of a END-product or a components manufacturer of a END-product.
Next up I will be writing a trilogy about my new portfolio... Stay tuned.
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