$PLAYMATES TOYS(00869)$ Playma-To The Moon - Tiger Brokers Online Investing Community - To The Moon

$PLAYMATES TOYS(00869)$

Playmates disclosed a positive profit alert this morning. They are calling for HK$347m of revenue (vs. HK$267m YOY) and Net Income of HK$87m (vs HK$1.4m YOY). There is some noise in the profit number relating to their treasury investments which, if excluded, would move things to some ~HK$72m vs. HK$28m YoY.

The revenue increase and the adjusted profits increase are attributable to the initial shipments for the TMNT movie. The toys hit shelves June 25th while the movie was released August 2nd. Not a ton of money yet but it does demonstrate the earnings leverage in the business and is a good sign given (i) the movie was more than a month away at period end and (ii) this business is typically seasonal [2/3rds of revenue in 2H when things are stable - this year should be more lopsided].

Nevertheless, the Company is at 6.8x annualized 1H adjusted earnings and has a balance sheet that makes it a net-net. Not only that but earnings should continue to inflect positively - 2H profits could be on the order of HK200m if history is any guide.

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