Dubai:
DXB Entertainments may witness weakness in the short-term, and should be seen as a long-term play, according to analysts.
DXB Entertainments reported a net loss of Dh1.11 billion in 2017 compared with a Dh485 million loss a year earlier, but the company posted a 45 per cent rise in visitor numbers with 851,000 visitors coming in during the first quarter of 2018.
“DXBE stock has gone down a lot, however it is difficult to be a buyer even at current levels. We believe the company will continue to make losses in the foreseeable future,” said a fund manager who did not wish to be named.
Shares of DXB Entertainments, which traded at Dh0.439 on Monday, have shed 30 per cent of their value so far this year, compared to a 9 per cent fall in Dubai index. The stock fell 51 per cent last year. The monthly average traded volume stood at 300 million shares so far this year, which is in line with last year.
The tone is bearish in DXB Entertainments, said Shiv Prakash, senior analyst with First Abu Dhabi Bank Securities in a note. FABS had a technical sell call on the stock at Dh0.49 for a target of Dh0.35 in mid-April.
Wait strategy:
“We would rather wait for the strategy from the new management to play out, of focusing on GCC residents, promoting the annual pass and marketing internationally through tie-ups with airlines, hotels and tour operators,” the fund manager said.
Investors should consider DXB Entertainments as a long-term play.
“The company announced solid first quarter numbers due to seasonality, however the second and third quarter will remain a challenge. We believe the company should diversify their revenue stream to generate returns even during summer time to ensure cash flow balance. Dubai Entertainments presents a long term play on tourism of Dubai’s expansion plan which should strengthen towards 2020,” said Tariq Qaqish, managing director — asset management with Menacorp.
