Replies to post #314 on Eros Media World PLC (EMWP)

[blulotus]

Eros looks like a great buy , market cap only $300mill,,thats cheap.. what am I missing ?

[finesand]

Little Compilation of DD (Update 2)

EROS presentation q1-fy20
-- http://erosplc.com/wp-content/uploads/2019/10/Q1-FY2020-v2-min.pdf

Since short seller attack and CARE rating drop in June:

- 20-F: Sarbanes oxley (SOX) compliance
- 20-F: Increased institutional holdings

- 1Q20 ER https://www.businesswire.com/news/home/20191008005513/en/
- Already cash flow positive with small profits in last quarter
- Forecasts to become free cash flow positive by year end

- Partnerships with OnePlus TV, WASU Media, Jio
- WASU 2019-08-19
-- https://www.marketwatch.com/press-release/eros-now-announces-china-vod-distribution-deal-with-wasu-media-2019-08-19
-- https://www.crunchbase.com/organization/wasu-media-holding

- Partnership with Microsoft Azure: AI Dubbing + Seamless video platform

- 10/8 1Q20 ER CC
-- https://seekingalpha.com/article/4295602-eros-international-plc-eros-ceo-kishore-lulla-q1-2020-results-earnings-call-transcript?part=single

- 10/17 - 10/18 RIL Earnings 2Q19
-- Showed steady growth ~25% in mobile subs etc, excellent ER

- 'Laal Kaptaan' released 18th October 2019
--

-- https://twitter.com/hashtag/LaalKaptaan?src=hash

- 'Roam Rome Mein' released 22nd October 2019
-- https://twitter.com/hashtag/RoamRomeMein?src=hash

- 10/22 (filed) SHAH CAPITAL MANAGEMENT added 1.34M shares to 3.74M on 9/30 (source)
-- https://whalewisdom.com/stock/eros

Coming up:

- 11/1 Apple TV+
-- https://www.rapidtvnews.com/2019040355664/apple-tv-to-carry-eros-now.html
-- https://www.theverge.com/2019/3/25/18281243/apple-tv-plus-app-explained-features-subscription-video-service-shows-originals-channels

- 2019 Deal Closing - Strategic Review
-- Strategic Review with CITI
-- About to close a pending deal (CC: Lawyers told CEO to STFU until its done)
-- 1Q20 ER CC 10/8:

Kishore Lulla
I could say only one thing, Tim, that we are very happy with the progress, but I'll be driven with - by my lawyers on this, and my lawyers told me to keep your mouth shut and not to say anything until it's done.

- 2019 CARE upgrade in 30-60 days or so, November-December
-- 1Q20 ER CC 10/8:

I hope that within the next 30 to 60 days, we should get back our ratings, which was earlier. That’s the earliest we're looking at.

- Debt buyer of 2017 and 2019 a mysterium, Reliance/Jio?
- $25M Note conversion $3.59/sh or VWAP after 4 month (50/50 potential)
- Reliance Short Trap: https://economictimes.indiatimes.com/master-move-how-dhirubhai-ambani-turned-the-tables-on-the-kolkata-bear-cartel/articleshow/9059587.cms

Upcoming Film Releases
• Flesh by Siddharth Anand (target release Q2 FY20)
• Brahmm by Gaurav Sharma (target release Q2 FY20)
• Halahal, a digital film by Zeishan Qadri (target release Q3 FY20)
• Avatar: The Legend of Vishnu by Anirudh Pathak and Sree Narayan Singh (target release Q4 FY20)
• Metro Park 2 by Abi Varghese and Ajayan Venugopalan (target release Q4 FY20)
• Crisis by Gaurav Chawla and Nikhil Advani (target release Q4 FY20)
• Ponnyein Selvin (target release FY Y21)
• Smoke 2 by Neel Guha (target release FY Y21)
• Bhumi by Pavan Kripalani (target release FY Y21)



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Financials / Valuation Metric:

1Q20 Ending 2019-06-30, as stated on 2019-10-07
- OS 137M (fully diluted class A + B as of 2019-09-06 ???)
- Total Cash $81M
- Current Receivables $209M
-- Fair value $130M
-- Amortised cost $79M
- Current Assets $299M
- Current Liabilities $263M
- Working Capital $36M
- Total Assets $1051M
- Total Liabilities $372M
- Equity $679M or $4.96/sh
- Net cash generated from operating activities $10M

EV calculus using Total Liabilities:
OS 137M (fully diluted class A + B)
MCAP-1 137M x $1.40 = $192M
MCAP-2 137M x $4.00 = $548M
Total Liabilities $372M
Total Cash $81M
EV-1 $483M
EV-2 $839M

Full fiscal year 2020 forecasting: Revenue $200M - $220M, adjusted EBITDA $80M - $95M and net debt $100M - $110M

Using revenue full year $200M as the lower end.

1) EV/R 2.42, P/S 0.96 (mcap-1 $192M, 137M sh x $1.40/sh)
2) EV/R 4.20, P/S 2.74 (mcap-3 $548M, 137M sh x $4.00/sh) **** Min Target ****

Also https://www.marketwatch.com/investing/stock/EROS/financials/cash-flow/quarter (1q20 not yet included)

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EROS / EIM Structure

EIM - Eros International Media Limited (Traded in India)
EROS - Eros International Plc (Traded on NYSE)

Simply using MCAP and SP of 2019-10-17 Pre-Market,
the proportion is important.

37.62% of EIM MCAP ~160 cr = $22M -> 100% EIM $58.48M
Traded daily now 17 INR x 200k = $48k

EROS MCAP $205M (137M diluted OS A + B @ $1.50)
Traded avg $1.50 x 4M = $6M
(1 Crore = 10,000,000 = 10 Million)

EROS owns ~62.4% of EIM: $36.5M, 22.5% of EROS MCAP

EROS 77.5%: Eros Digital FZ-LLC and 'Other Int Subs': $159M
- Eros Digital FZ-LLC includes Eros Now
- Other Int Subs:
-- Big Screen Entertainment Pvt Ltd (64% share)
-- Colour Yellow Productions Pvt Ltd (50% share)
-- Copsale Limited
-- Digicine Pte Ltd
-- Eros Animation Pvt Ltd
-- Eros International Distribution LLP (99.8% share)
-- Eros Music Publishing Limited
-- Eyeqube Studios Pvt Limited (99.9% share)
-- Techzone 56060

(See https://en.wikipedia.org/wiki/Eros_International#Current)

(Group Structure p28 from EROS presentation q1-fy20)



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