Member Info for MB10

3 bricklive events highlighted here

https://www.netmums.com/activities/must-do-summer-activities-for-lego-mad-kids/7-see-a-huge-lego-brick-artwork-at-the-design-mus

Detroit zoo getting some good media attention

https://www.youtube.com/watch?v=0q97iVaV0pY

What are the expectations of what the brokers note will say when it’s out within the next two weeks? My own prediction is at least £2m profit this year, and considerably more next.

The brokers note is key to understanding exactly what’s going on with lvcg after over 3 years of no financial guidance. Personally I believe that it will be a massive shock to some as the company has been totally transformed with the addition of the three new divisions.

My prediction is based on bricklive breakeven, LCSE breakeven, StartArt making £1.5m EBIT and thus covering central op costs, and the main profits coming from KPOP. If that £2m profit is true, just on a conservative P/E of 10 that would give a share price of over 8p based purely on fundamentals, however you could be justified using a much higher P/E if the growth was high. Add to that the majority of aim stocks don’t make any revenue never mind an actual profit, and my belief is that this will become the biggest turnaround on the markets this year. That’s going to disappoint a lot of people who would prefer to see lvcg fail and anyone invested lose all their money.

Great addition to the Madrid line up. This is going to sell out for sure IMO.

KPOP lux is the structure that investors were hoping for when these KPOP festivals were conceived. 100% comes to lvcg, lvcg are in control of the costs, get access via SBS to amazing lineups.

What Frankfurt is proving is that you need access and the relationships within Korea to successfully put on a festival and make a stonking profit. That’s the usp that lvcg can bring in the new structure of KPOP lux. It’s the “moat” that people talk about that prevents anyone trying to repeat what you are doing.

Lvcg is a company that is hiding in plain sight.

Agreed sfi2022, it’s all a bit sad really.

The first think you have to do with a P/E number is use the actual formula to calculate it. Simple seems to have ignored the fact that he has just made up a fantasy formula in the same way that he couldn’t understand how the bid and the ask were related to the share price or how that had anything to do with the spread.

He really is an idiot. Even if he was “popular” or not abusive, he is still an idiot.

It’s perfectly reasonable to predict the value of any investment using a forward P/E ration, indeed the market always looks forward and not backwards. “In the business world, the rearview mirror is always clearer than the windshield” Warren Buffett

IMO the market simply has lvcg wrong. The structure being put in place for KPOP festivals which have increased the lvcg share of the pie and deals being done under that new structure have gone unnoticed. It’s all there hiding in plain sight if you care to do the tiniest bit of research. But once the financial guidance is restored it’s going to be apparent that lvcg is the biggest turnaround story on the markets.

Curiosity got the better of me and I unfiltered simple to see what random drivel he is coming up with now, and wow, it’s right up there with “the bid and ask have nothing to do with the share price” territory.

Let’s look at Simple’s calculation. The company is making a loss (it is, that’s a fact, but that also means there are no earnings) but taking the future earnings, dividing it by the Number of shares in issue and THEN dividing it again by the Earnings per share figure from 2021 to come up with some random number.

Here is the actual calculation.

https://www.stash.com/learn/what-is-a-good-pe-ratio/#:~:text=Typically%2C%20the%20average%20P%2FE,a%20worse%20P%2FE%20ratio.

https://www.investopedia.com/ask/answers/070114/what-formula-calculating-earnings-share-eps.asp#:~:text=To%20calculate%20earnings%20per%20share%2C%20take%20a%20company%27s%20net%20income,number%20of%20outstanding%20common%20shares.

To calculate the actual P/E ratio at any given moment in time, you use the formula of dividing the share price by the EPS ratio. You get EPS by dividing the Earnings by the shares in issue.

If LVCG stayed at the current share price 1.65p hence market cap of £4.5 million, yet made a £2 million earnings in 2023, the EPS would be 2/259 = 0.772p the PE ratio would be 1.65/0.772 = 2.1

A P/E ratio of 2.1 is incredibly cheap for any share. That means to get to a more conservative P/E ratio of 10 you would need the market cap to be 5 times higher than the current £4.5m) I.E. 8p a share.

If they make £7 m profit in 2024 thats 27p. (Note that If the share price stayed at 1.65p the P/E ratio would be 0.6

Simple really is an idiot. His lates posting nails that out of sight

To full speed.

Wondering what you call someone who keeps coming back again and again and again to troll a share they had zero interest in, when they have apparently said they wouldn’t comment any further because they had sold their (fantasy) 4.3% holding?

This is in the “egg sucking category” for the savvy investor, so apologies, but some of those who troll these boards try and deflect and from the basics of investing, so it’s worth a discussion.

There are all sorts of different ways to determine if a share is good risk reward. One of the most reliable ways is using Price to Earnings ratio. Money talks, and for a share to generate earnings, it must ipso facto be revenue generating, and make an actual profit. Make enough profit and you can use that to either plough back into the business to grow, buy back shares (which reduce the shares in issue and in illiquid shares increases the share price) or distribute to shareholders via dividends.

Of course there are plenty of AIM companies that don’t generate a profit, especially in the early years as they go through the painful startup phase. Revenue always lags expenditure. Indeed there are plenty of AIM companies that never generate a revenue, especially in the resource sector;there it’s the value of the future sale of that resource that provides the valuation in the early years, but worth noting that it always comes back to what profits can be generated in the future. If the costs of extracting the resource exceed what you can sell it for, it dosen’t matter how big the resource is, that company will never make money.

So the P/E ratio is always the most reliable way of valuing a business. But for any loss making start up (PS reality check, all start ups are loss making), there won’t be any earnings to go on, so you have to look at the predictions. The weight you put on that depends on the company and the sector. For big established companies with a past history of earnings and long term contracts have repeatability that exercise is relatively straightforward. High growth companies tend to have a higher multiple that reflects the additional costs of growth (those costs reduce earnings). Worth also stating that the P/E way of valuing a business dosen’t take account of any of the intangibles like intellectual property.

So what about lvcg? The P/E multiple to use will always be subjective. IMO a multiple of 10 would be very conservative, but 23.5 wouldn’t be out of the question. What matters if if the company can make a profit. My own view is that they will make between. £2m and £3m in 2023 and if it keeps growing (remember all those KPOP concerts are multi year agreements), a lot more in 2024 (“profits bigger than the market cap” which was £7m when it was said). So if you use a range of P/Es from 10 to 23.5 that would give potential valuations in the range:

2023 assuming £2m profit = 8p to 18p

2024 assuming £7m profit = 27p to 64p

Don’t like my calculation? Use your own. But at least give a view why such a prediction is appropriate. And of course the share price won’t necessarily reflect exactly that multiple, but you can use it to determine if the share price is a good risk reward.

Anyone wanting to do some actual research on how to value lvcg and what considerations to place on this might want to start with the lengthy comparators from page 40 onwards of the note at the link. That concludes that a PER ratio in the range of 17.7 to 23.5 is appropriate. Using 10 would be very conservative, especially for a company that was forecasting high growth.

https://media.umbraco.io/live-company-group/cugbfxt3/lvcg-shard-research-1.pdf

Https://twitter.com/kpoplux_/status/1656721763646963721?s=61&t=rl988v07FmcdorCM6_Ebvw

Madrid artist announcement tomorrow. In time for weekend ticket sales this should propel this festival towards sell out. The social media response is pretty good.

This is a multi year concert, and the company have been working over the last 18 months to secure a new deal that gives lvcg a bigger cut of the pie (100%) and better control of the costs, plus a better deal with SBS for quality acts.

Madrid is exactly how we expected these festivals to be organised and put on. Lvcg are in control of all the levers to organise and are not dependent on the promoter. This event alone should deliver an actual profit for this event close to £2 million. Then there’s merchandising, sponsorship and live streaming to come on top. London will be the same, with a potentially bigger profit.

Random drivel generator to full speed; life is too short to unfilter and read the mad ramblings. Like everyone else who is actually invested (unlike anyone claiming to have had a fantasy 4.3% position) I’m banking in this being one of the biggest turnarounds on the markets this year when this swings to profit. Just don’t understand the psychology of those who are hell bent on seeing this (or indeed anything) fail; each to their own I guess.

There are two big questions on lvcg:

1. Can they manage the short term cash issues to get to profitability?

Todays RNS had the placing fear brigade out, and any company raising equity in these markets has a very tough time. That’s why they initially went to RF, but a group of long term holders replaced that facility only recently. The potential appearance of a £750k hole in the forward plan has been clarified by the chairman’s statement that they have covered the short term cash issue with £350k coming in from underused BL asset sales, deferring the StartArt consideration and the profits from Madrid landing in August. The upshot is that not only was the need for a placing discounted, there’s now 25 million less dilution than was being planned for. I for one think that’s a good outcome for long term shareholders and positive news that should have seen the share price increase.

2. How big will the profits be?

The company keep repeating that they will make a profit this year, which they did yet again this afternoon. They have landed material deals this year that clearly show that a big turnaround is in play. But until the financial guidance is restored, it’s all piecing together scraps of information. Plus what the chairman says and what actually happens aren’t always the same thing, so trust is very low, and investors quite rightly want to see the figures in black and white. But to all the “where’s the brokers note brigade” who constantly whine and point out that it’s been delayed for over a year, the company have clearly said now in 4 different places that it will come this month. If it dosen’t come then getting back to the constant whining is entirely justified, but until then just stop the constant moaning.

But if Madrid sells out (it will) on the €120 average ticket cost and assuming that breakeven is in the 40/50% range, then ticket revenue will generate over £2 million of profit, and as was heard this afternoon, the new deal with KPOP lux means 100% of that comes to lvcg. London is the same, so if that sells out (and we heard that the line up is the best they ever assembled) that’s another at least £2m profit. Japan generates $1m profit, so that’s £5m profit from the KPOP division. That’s all before Frankfurt, merchandising, sponsorship and streaming. Assuming so this is well north of £3m actual profit IMO. Once the market gets an actual sniff of that turnaround, on a low P/E of 10, that would support a market cap of over £30m, which is close to a 10 bagger from here. The 2024 profits are going to be even bigger than that if the chairman’s statement today is to be believed.

If you like that risk reward then stay invested or buy more.

That statement confirms that

No equity placing required to replace JL

Madrid and London profits come 100% to LVCG

The company will be profitable in 2023 and forecast to be significantly more in profit in 2024.

Brokers note will be out in May

Webinar 1 week after the brokers note.

They need a responsible adult to check what they put out!

Share price was dropped by the muppets on a placing fear, that’s no longer the case.

Statement is clear that an equity based raise is not needed to replace JL funding. I’ve asked the company to review that as IMO it’s material information that should be in an RNS.

It also confirms that tintin did indeed speak to DC today.

Market cap is just £3.5 million now. The bricklive assets are worth more than that 3 times that, and on the strength of todays sale of two of the 28 sets there is clearly a market for them, never mind the cash that those sets generate from rentals. They were to sell all of those, pay everyone off, there would still be more than the current share price left.

But the big money from rentals are from zoos and bids (a typical rental is from £125,000 to £250,000) and of all the sets the outer space set and mythical beasts don’t fit that market, so generating some cash from those to help in the short term seems a smart move.

The Japan JV formation done recently that put £650,000 working capital into the company also shows that not all funding is equity based. If it turns out that they manage to get non equity based funding for the KPOP shows, and have used the sale of bricklive assets to cover for some of the JL anticipated investment and thus there’s less dilution than thought, then that would be a good outcome for shareholders.

Agree with JS.

The turnaround when it becomes clear will be all the more dramatic IMO. Madrid is selling well and will sell out. That’s under the new arrangements where lvcg gets a bigger cut and the costs are lower. Todays news also confirms they are still working on Japan, for which we have a guaranteed $1m revenue and no costs. London is under the new arrangements too. Hopefully Frankfurt will sell once some decent acts are announced. Still on track to make a £2 to £3m profit in 2023 IMO.

They received £350,000 for outdated and underused assets. That means that the 1000 plus models that they have and the stock of bricks are worth over £10 million alone. As to “all assets are profitable” both mythical beasts and outset shape have been rented out multiple times before covid, so they will have been well within the cash generation period of those assets.

Todays RNS also confirms that JL’s money for StartArt and startcoin are being received, so along with the £400,000 in stock that he s bought at an average of 3.25p he is also contributing £700,000 in liscence fees. Earlier in the month when I was told that his cash had been received there was confusion with the liscence fee of £100,000, which had been recieved, so that clears that up.

“We continue to work with Jason Lee on Start. Art Korea and the Start Art coin as announced."

Specifically referring to that £100,000 StartArt licence fee and £500,000 startcoin licence fee.

I see that the troll who thinks it’s “his job” to warn investors about lvcg is unable to actually read. Personally I suggest that he gets back to his actual investments like Mothercare where he hasn’t been doing very well

Nice. £350,000 for the sale of two underused and outdated tours. There are another 26 plus bricklive touring sets, which on that metric are valued at well over £5 million, plus the stock of bricks are valued at more than £5 million too. Shows how undervalued this is.

The other Madrid headline act Ateez has just sold out 4 days in Japan, showing that’s a completely different market for KPOP. No wonder DC got an amazing deal where not kinky did the JV out in £650,000, but Birdman are funding $1m in licence fees up front in exchange for all the ticket revenue.

There’s further income to come from “Additional revenue will be generated via merchandise, sponsorship (Birdman Inc will receive commission for any Japanese Sponsorship they arrange) TV broadcasting and streaming and a profit share. KPL shall own all copyright and commercial rights in the Concert (including live streaming rights distribution rights, merchandise rights and sponsorship rights). Birdman Inc can retain 40% of the net revenues for Concert Mark merchandising at the venue.“

https://www.allkpop.com/article/2023/05/ateez-successfully-completes-their-sold-out-encore-concerts-in-japan

ATEEZ's Japanese encore concert ''The Fellowship: Break the Wall'' was held on May 2 and 3 in Tokyo and in Kobe on May 6 and 7.

This concert received an enthusiastic response, selling out all tickets in both Tokyo and Kobe. Appearing in a more heated atmosphere than ever before, ATEEZ prepared Japanese versions of songs and drew great response from the audience at performances.

And yet in a concert in Japan in 2023 enhypen (a band in the Madrid concert) sold 2 days in less than 5 minutes.

And as to the “slowdown in the USA”, those reports are about BTS, and yet Hybe posted a record financial quarter in 2023. As Mark Twain once said, the reports of his death were greatly exaggerated.

https://musically.com/2023/05/03/hybe-reports-another-strong-quarter-as-k-pop-growth-continues/

BTS may be on hiatus (military service included) but that hasn’t prevented the company behind the K-Pop group, Hybe, from achieving record first-quarter financial results.

The company posted revenues of 410.6 billion KRW (around $306m at current exchange rates) and an operating profit of 52.5bn KRW ($39.1m) in the first quarter of this year. Those are year-on-year increases of 44.1% and 41.7%, respectively.

The company says its WeVerse superfan platform has added nearly a million monthly active users since the start of the year, taking it to nearly 9.4 million in total.

The average user spent 251 minutes per month on the platform, and the Weverse Live livestreaming service attracted 460 million views in the first quarter.

It’s welcome news for Hybe, which recently had to abandon its attempt to acquire a 40% stake in fellow Korean music company SM Entertainment.

The company is unlikely to see the results as an excuse for complacency however: chairman Bang Si Hyuk recently warned that K-Pop growth is slowing in the US and south-east Asia, and that in BTS’s absence, the K-Pop industry needs to work hard to fill the gap and create new fandoms around other artists.