Member Info for MB10

The various revenue streams for KPOP are really starting to flesh out now. Costs for this are very low and with very strong ticket sales for both days that revenue stream is set to deliver LVCG with over £1m in profit. Merchandising is expected to deliver a similar amount. Then there is the sponsorship which will be better in future events as this first festival will show the demand. And now the streaming revenue, which is frictionless and scaleable to the over 60 million social media followers of all the various KPOP acts (a very large proportion of whom are outside Korea) looks very good too. Its easy to see how the prediction of “profits as big as the market cap” will stack up and if the streaming takes off it could be even better than anyone hopes.

To note that the contract is with lvcg and NOT KPE. So 100% of the 60% comes to lvcg.

So every 139,470 streams is £1,000,000 profit straight to lvcg.

This shows that the costs lvcg are responsible (royalties and artists fees) for are likely to be tiny.
https://www.hypebot.com/hypebot/2021/09/why-youtube-musics-most-recent-figures-are-actually-good-news-for-artists.html

Revenue will be generated via a pay per view system with Doors retaining between 38.5 and 35% (dependent on volume of streaming tickets sold) of total net revenue (after costs) with Seoul Broadcasting Service (SBS) retaining between 1.5% and 5.00% and LVCG retaining the 60% balance.

Some of these swing trading charting “gurus” are no more than guessing. If you throw out enough “predictions” some of them are going to be right, but do they highlight when they get it spectacularly wrong, or do they just keep redrawing and re predicting to change the story as the price unfolds? (Check out the adme share price now for example and compare it to the “looks good technically” https://twitter.com/borg74/status/1394359282460766211?s=21&t=2UP2yftKFJ_Urizz5_7xXg). Have a look at the twitter feed and you can see that some of these charting “gurus” got the LVCG price direction on Friday totally wrong too, and by the afternoon they had totally flip flopped. Follow these apparent gurus enough and you can easily see how they are connected (and that’s not in a good way). Don’t get me wrong, I’m not saying there isn’t anything in technical analysis, and it does provide some rational for share price movement, but in AIM shares it’s fundamentals and most of all execution of the initial promise that will drive the price in the medium to long term more than technical analysis.

Lvcg still hasn’t restored financial guidance, so there’s not much to go on, and it takes a modicum of actual research which is generally lacking in your average rainbow chaser. However, if you look properly and listen to some of the investors calls, there have been some pretty big pointers. Provided they continue to execute and deliver a profit, its the fundamentals that will come into play here. Importantly the contracts being let are not just one off flash in the pan revenue, but recurring revenue streams. The first kpopfest is in a growing sector and is a 5 year deal and the event is clearly scaleable. The costs are pretty low and there are excellent returns being promised. The formula E with the efest and other events around it is a 10 year deal, with good economics around it too. The efest could also be scaleable around the formula e host cities (look at the delivery partners, they have a global footprint). If lvcg can deliver a profit this year, and the Chairman is on record as saying “profits as big as the market cap, which was circa £7m at the time), then the share price should be valued against a P/E ratio of at least 10 but probably higher (and the sector average is 47) as it’s still in the early stages of growth for these new business. this is still massively undervalued IMO.

LCSE are paid a management fee for the ocean race. Plus there is the opportunity for cross selling given that the last ocean race attracted over 1.5 million visitors to the waterfront.

It’s going to be a busy few months early next year in Cape Town. This is one of the longer stops.

https://www-dailynautica-com.translate.goog/vela/annunciate-le-date-di-the-ocean-race-2022-23-arrivo-a-genova-il-25-giugno-2023/85981/?_x_tr_sl=it&_x_tr_tl=en&_x_tr_hl=en&_x_tr_pto=sc You

Dates have been confirmed for all eight The Ocean Race 2022-23 stopovers

Cape Town, South Africa: expected arrival 9 February; departure of the third stage 26/27 February

The bricklive corporate division is picking up too, and looks like a nice business development opportunity emerging.

https://www.aroged.com/2022/04/22/bethesda-showed-life-size-doom-slayer-from-the-designer/

“The Brick Live team is already talking about possible creation of other similar models of video game characters.”

Its important to understand how price moves as it can avoid emotions driving the wrong decision, and it’s clear that manipulation does happen. This morning was a clear attack on 10p stop losses that might have been there. The twitter thread below gives a good explanation.

https://twitter.com/shiftingshares/status/1517416430811193344?s=21&t=7R_md1CjbZuQMQfYySRMFA

Today looks more like a fishing trip for the muppets. The level and number of sells certainly don’t justify the movement and too many of the sells that are dragging the price down are “round numbers”. An opportunity to accumulate ahead of the big news that’s expected as once the actual numbers come out the compelling investment case will be even more apparent.

https://twitter.com/sportschris/status/1516230257312874496?s=21&t=nDl_wAXy5u15lFBFrGwFGQ

What’s interesting about bricklive is that customers keep coming back again and again. That’s because the product works in increasing footfall. Take Marwell, this is their 4th rental, and the increase in the gate more than offsets the cost of the rentals. Same with other zoos like Naples, Stone Zoo, knowlsley etc. The BIDS are the same, most making multiple rentals, year after year.

For the zoos, with animal Safari, Brickosaurs, supersize and ocean a zoo could rotate rentals over a 4 year period and then begin again, making this a good recurring revenue model.

The economics of this are compelling too. They have 28 touring sets of various sizes, which at an average of £1000 a day, gives an earning power of £10 million a year if fully rented out all year round. A 50% a year capacity target noting that they rent all round the world and can take advantage of summer seasons in both hemispheres. With covid restriction receding, the demand to attract people back is increasing. That’s playing out in practice with all the rentals we are seeing now. £5 million revenue for this arm of the business is not unrealistic.

Then there’s bricklive live shows, the first of which is bricklive in the park. That will generate over £1 million from that one event. When those get back up to speed that’s easily a £5m a year revenue generator. Op costs for the business are less than £5 m, so this would have been headed into profit on bricklive alone.

Then add in KPOP, streaming, sponsorship and merchandising, getting up to 4/5 festivals by the end of next year, then formula E, the efest, golf tournament, cycling, volvo ocean race stopover and the profit generating potential here is enormous. When figures are released to the market more formally which will come in the independent research note next month as well as trading statements to come, its likely that this will rerate massively as all those revenue streams are recurring.

Sure it won’t go up in a straight line and warrants and profit taking will cause variations, but it still looks to be the biggest turnaround story this year IMO.

Nissan committing to formula E for the long term. Cape Town formula E is going to be a big revenue generator for the company. Big kick up in revenue and profits coming in 2023.

https://www.carandbike.com/news/nissan-acquires-e-dams-formula-e-race-team-2890453

The acquisition of the e.dams team not only reconfirms our long-term commitment to Formula E, but also to the exciting, high-performance world of motorsports competition as a whole. But we don't only love to compete. We're also passionate about delivering innovative and exciting driving experiences while demonstrating our commitment to zero-emission and sustainable solutions. This acquisition will further empower us in the strategic electrification objectives of our business”, said Ashwani Gupta, Nissan's chief operating officer.

The company also said in a statement that its participation in Formula E supported its commitment to electrification under Nissan's Ambition 2030 plan with the acquisition being a natural step for the brand.

Not sure I really understand the attraction of NFT’s, but then again I don’t understand the attraction of crypto assets and some of those have really taken off, so being in early at the ground level can be very profitable.

I see that HMT were creating an NFT which gives more credibility to them as an asset class. So the investment in StartArt might pay off one day.

https://twitter.com/hmtreasury/status/1510971092072079360?s=21&t=CvkzT8tbqXT0ih7rcQ1gPg

Those recently looking at these boards should know that it’s no secret that the chairman wants to build this up to sell hence why they are concentrating on putting multi year contracts in place. Gives a good out for anyone building a sizeable position.

“Furthermore with KPOP.Flex we are building an asset value which in due course could be highly marketable to large event companies.”

At the recent interview a clear statement was made that this years profits are expected to be the same as the market cap, which at the time was circa £7 million.

Going on a very conservative P/E of 10 would be 38p and a more realistic P/E for the sector of 20 (the sector average is actually 47)would be 77p.

But given that 2023 is likely to be even better than this year as these are recurring contracts, more kpopfests are planned (4/5 in 2023) and there is the formula e and efest revenue next year too, this could easily be a lot higher on fundamentals.

Of course there might have been a bit of an overstatement, although recently the Chairman’s interviews have turned out very accurate, so adjust yourself, but even if its a couple of million out, 30p would still look cheap.

Brickosaurs in Livingston is proving a hit. It’s why they get so many repeat customers.

https://www.dailyrecord.co.uk/news/local-news/dinosaur-trail-proves-hit-26637205

Since the last Calendar was published and the investors event in December where it was stated that there were 1800 days of bricklive booked for 2022 at an average of £1000 a day there have been some significant events landed (not all of which have been in an RNS). This includes :

Oklahoma Zoo
Stone Zoo
Palexpo
Marwell Zoo brickosaurs
Knowlsley Zoo
Basingstoke
Livingston
Northampton

That’s well over 500 days of additional rentals. Add to that the bricklive in the park announcement which is worth more than £1 million in revenue and the bricklive division must be profitable this year already

Starts tomorrow.

https://twitter.com/r2gobournemouth/status/1509508667586097165?s=21&t=UKQMELWuIOLLFYMv30GRvA