The company's sales ratio between concessions and box office increased from 27% in 2012 to 29% in 2013, exceeding the company's expectations. SF Cinema City is the second largest cinema operator in Thailand, in which the company held approximately 20% of the market shares. SF Cinema – the second largest cinema exhibitor in Thailand, holding approximately 20% of the market share.
Home Entertainment Media Companies – the company sells VCD/DVD to customers whose price is cheaper than a movie ticket. This is one of the effective cost control strategies that MAJOR has used, making the company more competitive in the industry. The total investment amounts to 150 MB, which indicates that the company has started to expand its business to an international level.
CJ CGV – the largest multiplex cinema operator in South Korea listed on the Korean Stock Exchange since December 2004, the company offers customers the luxury cinemas, hall for concerts, musicals and opera performances. However, because MAJOR may be able to control its operating expenses more effectively than peers resulting in the company getting the highest EBIT at 17.59%, then Toei LTD follows at 10.96%, and PVR LTD at 7.79%. By the way, for CJ CGV, the company spends more money for operating purposes such as R&D expenses, ultimately it leads to the EBIT of CJ CGV to be at 5.53%, which is lower than other firms.
In terms of net profit, MAJOR can still manage its borrowing costs and tax liabilities better than others, so the company has a profit margin of 12.43%. However, for Toei LTD, the company chooses to run its business using equity more than liability - issuing common stock to share ownership and liability, so Toei's total liability and equity consists of equity for 56.76%. The reason is that MAJOR invests more in fixed assets to expand its business so that the company will be able to generate more profit from this investment.
Therefore, it can be concluded that MAJOR's ability to pay immediate debt is worse than CJ CGV and Toei LTD, because MAJOR has more inventory, which is difficult to convert into cash, it will affect the company's liquidity position. But in the year 2013, debt to equity ratio at MAJOR rises sharply to be 1.23 because the company borrowed more money for expansion project. However, this rate is still lower than CJ CGV, where the rate in the year 2013 is 1.90, which means that CJ CGV runs its business with debt more than equity, so it requires the company to have more cash on hand for interest payments.
After that, it started to increase in 2010, until 2013, MAJOR's net profit is increasing significantly due to successful movies and expansion projects of the company. After that, in 2013, the total value of the company's assets has increased significantly, the main reason being the acquisition of properties, facilities and equipment from the expansion of branches, as well as the increase in investments in the joint venture (Siam Future Development Company). . However, in 2013, MAJOR's equity value has decreased because in that year the company chose to operate its business using liabilities instead of equity.
Therefore, to manage the competition risk, the company tried to maintain the customer base and explore new customer groups with additional entertainment experiences, including bowling center, karaoke and continuous renovation of the theaters that make MAJOR become the most important cinema operator.
DATA 32
- Major Cineplex business structure 32
- SWOT Analysis 33
- Strengths 33
- Weaknesses 34
- Opportunities 35
- Threats 35
- Five-force Analysis 36
- Threat of New Entrants 36
- Bargaining power of Suppliers 36
- Bargaining Power of Buyers 37
- Intensity of Rivalry among Competitors 37
- Threats of Substitute Products 37
- Income Statement 38
- Balance Sheet 39
- Statement of cash flow 40
- Corporate Governance 41
- Weighted Average Cost of Capital Assumption 41
- Terminal growth rate 41
- Free Cash Flow to Firm 42
- Weight of debt 43
- Cost of debt 43
- Cost of equity 43
Moreover, the company is also known as one of the world's best providers of cinema and lifestyle entertainment complexes. Variety of products and services: MAJOR's core business includes many entertainment activities such as cinema, bowling, karaoke, ice skating rink, etc. Customers will have many more choices to come to MAJOR Cineplex to entertain themselves, it is not only In addition to the business expansion, it helps the company also wants to expand its customer base so that it can reach people of all ages. Strong Brand Awareness: Since the company's logo is quite prominent and easy to remember, along with the various activities offered, when people talk about entertainment, they will think of MAJOR Cineplex.
This will cause this firm to gain more market share and increase its bargaining power with all stakeholders in the industry. Difficulty in quality control: Although maximizing customer satisfaction is one of the most important missions of MAJOR Cineplex, sometimes having more branches makes it difficult for the company to control the quality of products and services offered to customers, especially in rural areas . Understudied situation: Until now, Thailand is still in the understudied situation, especially in the rural areas, also because the shopping center that is growing rapidly and practically everywhere, offers a good chance for MAJOR Cineplex to increase its cinemas in the market in serving more customers.
Film Rating System: Before any film can be shown in theaters, it must be rated by the Ministry of Culture. Sometimes the rating is specific to only a group of people, meaning the income MAJOR can get will be limited. Because MAJOR Cineplex already has about 80% of the total market shares in the film industry and it is only one company in Thailand that provides the entire lifestyle entertainment complex – almost a monopoly in the market. Furthermore, the company has a strong relationship with its business partners and sponsors; MAJOR gets some privileges.
For these reasons, it caused a lot of difficulty for newcomers to enter the market and compete with the big Cineplex. However, there are few theatrical exhibitors in the Thai cinema market, so all suppliers will have low bargaining power if they want their film to be screened in the market. For other businesses such as bowling & karaoke and skating rink, there is only a MAJOR that provides this type of entertainment, so suppliers will have the power to bargain much lower in the industry.
They have to compete among themselves to retain and/or win more market shares in the industry. With this in mind, the Company's Board and management have implemented, reviewed and improved good corporate governance practices to ensure that the Company has an efficient and transparent governance system. Such measures were carried out to create confidence among the company's shareholders, investors, stakeholders and all relevant parties and reinforce that MAJOR's business operations fully comply with good corporate governance practices and business ethics.
We will perceive the company as a high-quality listed company with high responsibility and transparency in all parts of its operations. Since 2009, the company has been implementing and maintaining good corporate governance practices, which can be divided into 5 sections as follows.
