Member Info for RS2002

Vaccine ready in 58 days?

Big news!

1. Vaccine phase 3 trials interim results due 2 weeks
2. FDA hinting at early approval
3. Before elections

Source: https://www.wsj.com/articles/trump-administration-asks-states-to-be-ready-for-vaccine-by-november-11599075477

We know Trump and AstraZeneca have discussed emergency FDA approvals, on the basis Phase 3 trials end. More good news is that Dr Fauci, director of the National Institute for Allergy and Infectious Diseases has now said trials can end earlier if there is sufficient data to suggest a positive outcome.

I suspect we are going to see Trump’s timeline of a vaccine before November, this year (read: elections) come to fruition.

This is a game changer as we can expect news any day now on approvals and a legitimate vaccine.

Recovery stocks will lap this news up and Cineworld will be no different. Now is the time for patience as the recovery is around the corner.

Source: https://www.reuters.com/article/us-health-coronavirus-usa-fauci-idUSKBN25T2O2

2019 reported a 4.6% drop in admissions BUT, as domestic box office revenue ended on a down note in 2019 at $11.4 billion — falling 4 percent year-over-year but also marking the second best on record. Further more, the average price of a movie ticket rose to $9.37 in the fourth quarter of 2019, so you didn’t account for inflation of ticket prices.

Source: https://www.hollywoodreporter.com/news/domestic-box-office-attendance-falls-46-percent-2019-1270900

Trying to push an angle that cinema attendance is down in futile. Recent press has praised the recovery and China has recovered to pre-Covid levels. Source: https://variety.com/2020/film/news/china-first-box-office-recovery-1234751777/amp/

Poor Indepth Bot engine, repeating itself but faced with facts that dismiss its false narrative.

Excellent point, Damo

Again the sophistication of the Indepth Bot is exposed. All sources and points are 2020. The only thing quoted from 2019 (December 2019) is the official net debt of $3.5BN.

I didn’t post speculation just facts. I do believe projections will see EBITDA revised to $388m met and Mooky confirming sold out shows/screenings and this before 73% of Cineworld’s estate is accounted for Tenet which premiers tomorrow including New Jersey, so expect New Yorkers making their way over.

In simple terms:

1. Default risk 4-6% on basis of debt score B
2. Risk of bankruptcy is 7%

Don’t be led astray by derampers.

AMC is doing fantastic. Why? Because of box office demand. Cineworld will be joining them soon. Just be patient and hold/top-up.

Your automated responses prove you don’t read the posts and make me believe you are a BOT engine.

Per my earlier post, addressing default and bankruptcy:

4. Debt worries have been MITIGATED.

Debt may be Grade B on the Fitch scale but that is it - it's debt. Investors aren't trading debt securities so the grade B (like Rolls Royce btw) has a default risk of 4-6%, so a 94-96% positive outlook for their debt position.

Lenders are SO CONFIDENT in Cineworld they INCREASED their ND/EBITDA ratio from 5.5x to 9.0x.

Cineworld passed this test in 2019 at 3.4x SCORING 62% HIGHER than they needed to. No surprise that lenders were willing to relax this to 9.0x this year.

Cineworld will PASS their debt covenant test this December 2020 with ample room to spare.

The next test will be July 2021 at 5.5x and given the progress of a global vaccine and the V recovery that global markets are prediciting, Cineworld is projected to meet this covenant test and pass it too.

Bankruptcy risk of just 7% suggests a great entry or investment point in a diverse portfolio.

Source: https://www.macroaxis.com/invest/ratio/CINE.L/Probability-Of-Bankruptcy

With NO big refinancing obligations looming, Cineworld has LIQUIDITY available to survive up to 18 months of lockdowns, estimates Bank of America. Yet the stock is down by more than 75 per cent in the year to date, they quoted.

This is excellent news.

Just be patient.

Once Cineworld publish H1 results like AMC they will outline a recovery path which will have Cineworld share price recovery accordingly.

Box office demand and assurances following 24 September will see us join AMC.

Fundamentals, fundamentals, fundamentals.

1. Cineworld family trust retain their 20% stake. Following the refinancing, GCT is not required to make any debt service or amortisation payments for three years (absent customary specified events), nor is there any margining requirement.

2. Jangho reduces their holding slightly but retained the majority. This also explains the large sells which were being hoovered up.

We can expect to see positive news following US Labor Day and leading to 24 September

7. Cineworld US (73% of their estate) opening in a phased approach and will ACTIVATE 300,000+ subscriptions, each paying upwards of $23/month. That will join the U.K. and European members, too which is a significant contribution to earnings via PASSIVE INCOME generation.

8. Box office demand in the US and China is demonstrating a strong recovery. So much so, China has recovered to pre-covid 19 box office. Source: https://variety.com/2020/film/news/china-first-box-office-recovery-1234751777/

9. AMC Entertainment, rival cinema group has recovered to 90% pre covid prices which suggest Cineworld should be trading at 160p.

Indepth likes to regurgitate the same old news so I can respond accordingly with an alternative view. This supports the fundamentals.

1. Cinemas operate a profit at as little as 10-20% capacity and are on course to open all their territories before the close of this month. Source: https://www.cnbc.com/amp/2020/04/15/cinemark-offers-a-look-at-movie-going-post-coronavirus.html

2. Face masks worn is encouraging as it promotes the government's message and mitigates the risk of further closure.
In line with government guidelines, all customers will be required to wear face coverings whilst visiting. They can however be REMOVED to consume food and drink (a great up sale for concession sales, you will agree). Source: https://www.cineworld.co.uk/static/en/uk/blog/cineworld-cinemas-reopening-FAQ-frequently-asked-questions-coronavirus-covid-19

3. Schools have now re-open; millions of children sitting for 6 hours+, side by side, no social distance or masks and frequent touch points vs cinema viewing in staggered, static seating with frequent cleaning and controls is a lot safer.

4. Debt worries have been MITIGATED.

Debt may be Grade B on the Fitch scale but that is it - it's debt. Investors aren't trading debt securities so the grade B (like Rolls Royce btw) has a default risk of 4-6%, so a 94-96% positive outlook for their debt position.

Lenders are SO CONFIDENT in Cineworld they INCREASED their ND/EBITDA ratio from 5.5x to 9.0x.

Cineworld passed this test in 2019 at 3.4x SCORING 62% HIGHER than they needed to. No surprise that lenders were willing to relax this to 9.0x this year.

Cineworld will PASS their debt covenant test this December 2020 with ample room to spare.

The next test will be July 2021 at 5.5x and given the progress of a global vaccine and the V recovery that global markets are prediciting, Cineworld is projected to meet this covenant test and pass it too.

Bankruptcy risk of just 7% suggests a great entry or investment point in a diverse portfolio.

Source: https://www.macroaxis.com/invest/ratio/CINE.L/Probability-Of-Bankruptcy

With NO big refinancing obligations looming, Cineworld has LIQUIDITY available to survive up to 18 months of lockdowns, estimates Bank of America. Yet the stock is down by more than 75 per cent in the year to date, they quoted.

5. Shorts are nothing new, in Jan 2020 this year shorts were 14% and share price was 164p.

6. Tenet the BIG Blockbuster of 2020 is demonstrating positive box office data. Source: https://deadline.com/2020/08/tenet-christopher-nolan-the-eight-hundred-imax-china-international-box-office-1203024679/

Hammersons opened at 200p this morning (200/5 being equivalent of 40p) and is now trading at 300p so has risen 50% from open. This is an equivalent of 60p pre share consolidation. I really hope this burns a lot of shorters and it continues to see growth. It has property assets valued at £8bn, granted its LTV is around 50% it has assets worth £4bn. There is a huge disconnect with its NAV and a price correction is long overdue.

Morning Winni, thanks for correcting me. I just saw near £1bn raised but not sure why the SP is reporting so high

The recovery can quickly. Cineworld can expect the same.

Some very positive news around the corner, so don’t be fooled into selling for the inevitable drive back up.

1. Tenet to premier in the US in 3 days time
Encouraging data suggesting positive box office sales and we can expect the US, much the same way Canada has, to demonstrate positive box office figures.

2. Phase 3 trial data and AstraZeneca offering Trump and his administration a lifeline for emergency FDA approval for their vaccine in time for October/November; just 2 months and comfortably before winter season.

3. Jangho will likely make their intentions more clear given The Times article.

4. Existing synergies with Cineworld and Disney that kicked off in 2019, could resurface given they Paramount decree news.

5. US cases down 38% from peak and continuing to decline.

6. Schools resuming restoring confidence in socialising and “normalisation” of public gathering, bodes well for leisure and cinemas.

7. New titles remain set for, Marvel’s Black Widow, WB’s Wonder Woman 84, James Bond and Dune. Will entice audiences.

8. H1 results due 24 September and per Peel Hunt will reveal positive news around rent negotiations, good sales Jan-Mar and a roadmap outlining recovery path to end of year and 2021.

9. Short positions will be called at some point by institutions and will trigger a squeeze and surge of the SP.

10. Rival AMC Entertainment have recovered 80% of their SP. Cineworld? Just 33% and should be at 150p.

Don’t be fooled into selling as we saw last time. Use the opportunity to acquire more shares they will be up 15% tomorrow if we test 69p again.

Big news! I can expect Trump ready to tweet he will have the FDA approve this for emergency use ahead of November elections.

Let’s see how the market takes to this.

This is AstraZeneca throwing a lifeline to Trump.

I believe Cineworld should be much higher.

AMC have recovered 80% of their pre covid share price.

AMC 20 Feb 2020 = 7.76
AMC 31 Aug 2020 = 6.14 (80% of Feb)

Cine 20 Feb 2020 = 189.5p
Cine 31 Aug 2020 = 63.08p (33% of Feb)

Cineworld should be 151.6p.

So we can then expect to see Cineworld recovered to close to 150p imminently and supports the Peel Hunt Broker rating of 180p.

Welcome to the club, Amir.

Fantastic post, Laidback.

Cinema has also survived world wars, recessions and the Spanish Flu.

Shorts in Jan this year were 14% yet share price was 164p so at 9% shorted we can easily recover ground before the inevitable short squeeze.