RHB Research has downgraded UnUsUaL Limited $ UnUsUaL: 1D1 -13.04% to " neutral" with a lower target price of S$0.14 from its previous " buy" rating and S$0.16 target, as it believes a recovery is not yet imminent for the concert promoter.

 

This come as the research house now expects mass events to only resume in either Q4 2021 or Q1 2022 due to the emergence of the Covid-19 Delta variant, dampening RHB' s former expectations for such events to recommence in H1 this year.

 

" Although the worst is over for UnUsUaL, we still think concerts and events will likely not resume so soon&hellip We only expect events to resume from 1Q22 onwards, if the pandemic remains controlled with no new variants thwarting the efficacy of existing vaccines," said analyst Jarick Seet in a report on Wednesday.

 

Noting a severe financial impact in FY2021 from Covid-19, he thinks the following fiscal year will remain a weak one for UnUsUaL despite a slight recovery.

 

This is due to an expected absence of large-sized concerts - which served as a main revenue contributor in past years - to be held in Singapore in the near-term, although Mr Seet highlighted a possibility of concerts resuming earlier in other parts of the world, such as in China.

 

" We cut our stock rating to ' neutral' , pending updates and confirmation of the company' s future pipeline of concerts and events," he said.

 

Mr Seet nonetheless remains positive on the group' s move to produce live virtual concerts with Singapore-based music production company JFJ Productions through a recent joint venture (JV) and thinks this could serve as a new revenue stream for UnUsUaL.

 

While the analyst estimates the JV' s inaugural virtual concert which took place on July 10 to contribute about S$1-2 million in profits for the company, he thinks it may not be enough to bring it back to profitability in FY2022.

 

He added: " Management is working hard to maintain close relationships with its partners, artistes and managers, and will likely continue to produce and present more live virtual concerts in the future, in our view."

 

CATALIST-LISTED Unusual Limited is expected to record a net loss for FY2021 compared with a net profit a year ago on the back of disruptions from the pandemic, it said in a profit guidance on Wednesday after trading hours.

 

Unusual Limited, mm2 Asia' s events production unit, said that it is not spared from the impact of Covid-19, given that large-scale live events and concerts in Singapore and the region have been suspended or scaled down.

 

The group is also expected to record an impairment loss on financial assets during the year which contributed significantly to the net loss for FY2021, with Unusual Limited still in the process of finalising its unaudited financial results for FY2021.

 

It added that further details of the group' s financial results will be disclosed when the company announces its unaudited financial results for FY2021.

 

In October last year, the group had warned that it is expected to report a net loss for H1 FY2021 as compared with a net profit for the corresponding period in H1 FY2020 due primarily to the negative impact of Covid-19.