Our take on the results (In-line)

• For FILM, the scenario dramatically improved in 2Q24 given exceptional EPS growth of +1,480% QoQ and +22.7% YoY, partly driven by a low base effect, but largely due to the success of the films "Ipar Adalah Maut" and "KKN di Desa Penari 2," which propelled top-line growth to IDR 54 billion (+200.9% QoQ, +13.2% YoY). "Ipar Adalah Maut" was on top 10 highest-grossing of all-time Indonesian movies, attracting 4.7 million viewers, while "Badarawuhi di Desa Penari" secured the 15th spot with 4 million viewers.
• Operating profit surged to IDR 81 billion (up from a negative IDR 4 billion in 1Q24), thanks to the success of  blockbuster movies, allowing for promotional expenses as a percent of revenue to come down to 8.9% in 2Q24 from 21.3% in 1Q24. Subsequently, FILM’s 1H24 net profit rose to IDR 77 billion, aligning with our full-year expectation (44.4%).
• Looking ahead, we anticipate the 2H24 movie pipeline, featuring titles like "Jurnal Risa" and "Laura Movie“, will further enhance FILM’s performance. We also expect digital revenues to remain strong in 2H24, as OTT players expand their presence in Indonesia. Given FILM’s success in 1H24, OTT players are likely willing to pay premiums for leasing FILM's blockbusters.
• Backed by FILM’s solid results, we maintain a positive outlook on the company, particularly considering the potential for strategic partnerships and expansion plans. Additionally, FILM’s dividend distribution of IDR 25/share (DPR: 245.2%, Yield: 0.6%) on 1 August 2024 should help improve sentiment on the stock. That said, given recent market underperformance, we uphold our BUY recommendation on FILM with IDR 5,500 (DCF-based) target price, translating to 44% upside potential.