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Expect big buys tomorrow. The Times reporting Chinese state backed Jangho won’t just be glossed over. This fuels serious takeover speculation or synergies with a thriving (read: China box office is now fully recovered to pre-covid levels) Asian market.

The sheer ego of these derampers, convinced they would have any effect on investor sentiment is laughable. They have no new facts or negative news to report on so cling on to anything to present a negative angle.

Worse are the ones with subtle deramps like “if we do see a red day” or “so many derampers, if they do have some impact, it will be short lived”. Their motives are so transparent and belong on the bin.

Watch out for Ash89, posting nonsense after nonsense.

The fundamentals don’t lie

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 re-open next month September, 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. Source: https://www.theguardian.com/commentisfree/2020/aug/18/children-covid-19-english-schools-virus-safe-reopening

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 only 4-6%.

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% as well.

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

5. Box office sales for Tenet $53m and proving demand for theatrical release.

6. AMC has recovered 80% of its SP. Cineworld? 30%! We should be at 151p!

7. California districts reopening. NY to follow imminently.

8. Black Widow and Wonder

Casper you’ve conveniently ignored my earlier post. If we follow your logic, to account for AMC’s recent drop, we should also be at near enough an 80% pre covid recovery. Investors have enough information to make their opinion without a deramper or a ramper for that matter. Cineworld’s share price has been oversold and the fundamentals don’t lie.

Bolox I fully expect to see Cineworld recover to 150p+ I believe on Tuesday, tomorrow, we will see a share rise to 70s or 80s. The share price recovery was also hinging on box office recovery, Peel Hunt said so as well. This has been met so it’s time to see a strong recovery. We have a lot of ground to cover back to 80% pre covid share price.

Max, given the articles in the times and Box Office revenue of Tenet hitting mainstream media, it’s important new investors aren’t led astray by derampers. They are naturally nervous as Jangho are likely to increase their stake thus removing what little shares are left to close their shorts. The positive sentiment is there and the media is doing the real talking

A lot of nervous shorters. Their attempt to spam this BB will fall on deaf ears when the news of Box Office demand and Chinese speculation hits investors mailboxes and Times susbscriptions.

It’s going to be a bloodbath as they attempt to close their shorts.

I think we are going to sail into 70s, 80s even.

Agree Bolox particularly when you consider 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)

So if we follow Caspers logic, Cineworld should be 151.6p and then account for the 3% loss he cites taking it to: 147p.

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

Don’t forget the Peel Hunt rating of 180p.

Peel Hunt noted that the Cineworld share price has fallen further than any other in its sector coverage, but said it should "bounce hard" once investors are reassured over demand.
The broker cut its forecasts to reflect lockdown lasting longer than it had expected, lowering its FY20E EBITDA estimate from $1.1bn to $318m.
"A key assumption is that revenue will be 50% of pre-Covid-19 levels from September," it said. "However, having estimated cash burn (in the absence of published guidance from the company) we believe that the business will trade at worst on a cash neutral basis from September and end the year with $240m of cash and undrawn facilities."
Peel said that by the time the interims are due on 24 September, both trading and updated information from management should be positive for the share price.

Granted, Peel Hunt are quoting $318 EBITDA rather than $388m, that is just a 20% variance and easily plugged. I’m fact that was published before we had Mooky quote so many screenings were fully booked so clearly Peel Hunt stated “it [share price] should "bounce hard" once investors are reassured over demand.” Guess what? They demand is clear for all to see.

Source: https://www.sharecast.com/news/broker-recommendations/cineworld-shares-set-for-hard-bounce-says-peel-hunt--7617294.html

Source: https://www.chicagotribune.com/entertainment/movies/ct-ent-tenet-opens-overseas-strong-box-office-20200831-llhkkts65zeuphzqucnusqp5ba-story.html

@Damo from the ND/EBITDA from the December 2019 declared debt of $3.5bn, which at 9.0x is just $388m (3500/9).

Easily achievable. Wait for the 24 September when Cineworld’s BoD declare a projection ahead of this and we can expect a strong surge in the share price.

It seems there is a financial illiterate, on this forum who doesn’t understand the ND/EBITDA terms.

I appreciate stackhigh doesn’t want to school this individual so I’ll attempt to.

The Net Debt (ND) to Earnings Before Interest Depreciation and Amortisation (EBITDA) ratio is a debt ratio that shows how many years it would take for a company to pay back its debt.

Lenders will often undertake covenant tests, usually after each financial year to test the company on their earnings and ability to honour their loans and debts.

Pre-Coronavirus, Cineworld’s Net Debt being $3.5 Billion had a 3.4 ND/EBITDA ratio. Which was very low (under 5 is considered good) and was used to support covenant testing by lenders to install confidence that they were in a good place to pay back their debt.

Source (Financials at a Glance, Slide 4): https://www.cineworldplc.com/sites/cineworld-plc/files/2020-03/2019-full-year-presentation_0.PDF

It’s no secret that Coronavirus has impacted footfall and we have seen Q2 have zero income.

What investors need to be aware of is that Cineworld have negotiated some changes to their ND/EBITDA ratio to give them more breathing space to get through the current pandemic and reduced footfall.
Cineworld have had their ND/EBITDA ratio increased to 9.0 to support the testing covenant due 31 December 2020. This means when the lenders crunch the numbers, they will account for REDUCED income and a higher debt ratio. This is favourable as one cannot expect a company in leisure like Cineworld to perform at levels pre-Coronavirus until we see a vaccine in place and footfall back to its pre levels.

We know that in 2019, Cineworld scored a very good EBITDA of $1033m which resulted in a ND/EBITDA of just 3.4x ($3500m/$1033m). This kept lenders very satisfied that Cineworld were comfortably within revenue making headroom to clear the much more generous 5.5x ratio they imposed, which would have seen EBITDA needing to come in at a minimum of $636m. So to put that into perspective, Cineworld scored 62% higher in the test and easily passed to keep the lenders happy that Cineworld would be good to honour their debts.

Given the lenders have now provided a much more GENEROUS ND/EBITDA of 9.0x, to put that into perspective, Cineworld, at a minimum, to satisfy their net debt of $3500m, need a EBITDA of JUST $388m.

What is that as a percentage comparable to 2019? 37% ($1033m/$388m). Cineworld can pass their covenant test on the basis they can demonstrate profit earnings, EBITDA of just 37% of 2019.

In short, Cineworld is NOT facing imminent collapse and DOES NOT need to undertake a rights issue, as some commentators would like you to believe.

If I was a lender concerned I would call in a loan, not be so generous to push a test date.

This now means Cineworld need only demonstrate a 1/3 of their EBITDA this year to pass a very relaxed test. Easily do able. Why?

Well

1. Jan-Mar were unaffected and Cineworld quoted stronger revenue Tegan 2019 this period.

2. Cineworld have had media exposure about their aggressive rent negotiations. Search, Runcorn where they refused to reopen as it wasn’t going to be profitable. Music to investors ears.

3. Sufficient liquidity to remain closed for 18 months, Morgan Stanley say, not that it will be needed given all territories are open.

4. Mooky said 70% of costs are variable and given they are using zero hour contract staff don’t have to keep any expensive staff on.

All in all, positive news that appeases shareholders.

I’m now looking forward to Tuesday when we get the update from the BoD and retrieve Bank Holiday box office.

It also wouldn’t surprise me if Jangho increase their stake given the cat is out of the bag, following the Times article.

Couldn’t agree more.

Desperate posters attempting to talk down the share price with non-existent and mitigated concerns around liquidity and debt.

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 94-96% positive outlook for their debt, again from a private investor who is trading equities securities by way of stock purchase is not fazed by this.

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

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

With no big refinancing obligations looming, Cineworld has liquidity available to survive up to 18 months of lockdowns, estimates Bank of America.

I’d rather go by analysts than desperate derampers any day.

There is a bull sentiment returning and share holders are looking forward to, tomorrow when we can expect the Times article on a potential Chinese takeover, strong $53 million box office takes on Tenet, which doesn’t even factor US or China and most notably Mooky (CEO) citing some news on Tuesday together with sold out screenings demonstrating a significantly oversold Cineworld taking on a price correction of £1+ in my opinion.

We need to accept the decision to move Mulan to PVOD and Disney+ was politically motivated. Disney avoided embarrassment knowing full well it wasn’t going to perform well because of anti-Chinese sentiment.

I also believe this is where Jangho, state backed, Chinese could help to change the narrative. From the trailers I have seen of “The Eight Hundred” looks spectacular and has been cited as movie to rekindle Chinese patriotism. No secret China backs some of the biggest Hollywood movies like Mission Impossible and the upcoming Top Gun 2: Maverick.

Disney are remaining firm, Marvel’s Black Widow maintains its theatrical release and from the trailers, it looks incredible and well suited to this medium.

Apologies not sure why my comment was posted twice.

Fantastic article. Thanks for posting.

I’d like to see more Chinese involvement and an expansion of Cineworld into Asian territories.

It’s a shame The Times didn’t cite that

1. China has recovered its box office sales to pre-covid levels now. Source: https://www.newsbytesapp.com/timeline/entertainment/65268/307616/chinese-film-industry-has-recovered-pandemic-losses-reports

2. The Eight Hundred has accumulated $288M in China alone. More than the budget of Tenet.

I’m really excited for Tuesday, as many are.

Sentiment is shifting and leisure activities are demonstrating strong recovery if we gauge footfall and box office sales.

News that districts in California are re-opening movie theaters will suggest continued box office success and demonstrate the viability of cinema going more.

We can expect a lot more buying into Cineworld which will apply a lot of pressure on capital funds with open shorts.

Good luck, all and lots to look forward to.

Fantastic article. Thanks for posting.

I’d like to see more Chinese involvement and an expansion of Cineworld into Asian territories.

It’s a shame The Times didn’t cite that

1. China has recovered its box office sales to pre-covid levels now. Source: https://www.newsbytesapp.com/timeline/entertainment/65268/307616/chinese-film-industry-has-recovered-pandemic-losses-reports

2. The Eight Hundred has accumulated $288M in China alone. More than the budget of Tenet.

I’m really excited for Tuesday, as many are.

Sentiment is shifting and leisure activities are demonstrating strong recovery if we gauge footfall and box office sales.

News that districts in California are re-opening movie theaters will suggest continued box office success and demonstrate the viability of cinema going more.

We can expect a lot more buying into Cineworld which will apply a lot of pressure on capital funds with open shorts.

Good luck, all and lots to look forward to.

*plenty of more

Both states together represent 25% of Cineworld US estate.

Ole ty of more good news to come.

As expected. We are leaving the 60s and heading to 70s and upwards.

Chinese box office fully recovered is massive news given they are the largest audiences outside US domestic and set to OVERTAKE them.

Jangho needing to increase their stake will need to buy more now before they having to buy in at a much higher price.

Good point re: Mookys video.

That will have been watched by millions. His words that screenings have been sold and sales from Tenet so far have been very encouraging tells me they are seeing good profit levels.

Source: https://www.cnbc.com/2020/08/27/cineworld-ceo-mooky-greidinger-on-reopening-theaters-amid-coronavirus.html

Can we expect another RNS from Jangho, today? I suspect we may given the fact their market is doing so well and has recovered to pre-covid levels for box office sales. They can recognise the VALUE with Cineworld and will likely increase their stake.

I am feeling very optimistic about an expansion of Cineworld into Asian markets.