Nine Entertainment Co Holdings Ltd

Improving trends: Nine Entertainment Co Holdings Ltd.’s (ASX: NEC) stock surged up 3.1% on October 13, 2017 and has been up about 15.5% in the last six months (as at October 12, 2017). Lately, the group is witnessing an improvement in ratings and profits. It is worth noting that NEC’s reported FY17 revenue plunged 3.5% in falling TV ad markets, while EBITDA surged 2.9% at the back of cost controls and the benefits of licence fee relief. NEC had reported that their Free To Air TV turned positive for Nine in the second quarter of FY17 and this trend continued for remainder of FY17. Their 9Now usage has grown exponentially to over 4 million registered users, which has now become a major contributor to the P&L. The group’s Subscription Video on Demand platform Stan, has matured mainly over the last twelve months and has the number 2 position in the market. The group has also partnered with Microsoft in digital publishing business. NEC has also completed Willoughby sale. NEC has a solid dividend yield; and given the developments, we put a “Hold” recommendation on the stock at the current price of $ 1.50

9Now Milestones (Source: Company Reports)

SKYCITY Entertainment Group Ltd

Acquisition move to consolidate control over Auckland precinct:SKYCITY Entertainment Group Ltd.’s (ASX: SKC) stock edged slightly up on October 13, 2017, with the announcement about acquiring NPT Ltd.’s interest in the AA Centre, 99 Albert Street, Auckland for $47 million. With this move, the group aims to consolidate control over their Auckland precinct as part of the Auckland master planning. The group is aiming to leverage the rising pedestrian traffic flows expected post completing the City Rail Link. The group had otherwise reported a lacklustre FY17 result with slight softness in growth in NZ and significant declines in Australia and International Business. Further, SKC expects a modest growth across most of the key properties for FY18. Looking at the trading scenario, the stock is moving at a high price to earnings ratio. We give an “Expensive” recommendation on the stock at the current price of $ 3.39

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