CINEMARK HOLDINGS (CNK, $37.

72BUY)

COMPANY OVERVIEW

Cinemark Holdings (CNK-$37.72) is involved in the motion picture business. The company operates
theatres across the United States and in emerging market countries such as Brazil, Argentina, Chile,
Columbia, Peru and others. They are reported under two different operating segments which are U.S
markets and international markets.

Cinemark Holdings actively looks to build or acquire theatres across the world, in hopes of establishing
strong positions across all markets. Throughout the year ended December 31, 2016 the company built
18 new theatres with 144 new screens, along with acquired 4 theatres with 52 screens. Through these
acquisitions, they continue to expand their platform and develop new concepts.

CAPITALIZATION

Public Market Capitalization

All in Millions (except per share data)
Common Stock 116.4
RSU's 0.6

Total Diluted Shares 117.1

Stock Price $38.52

Equity Market Capitalization $4,509.5

Cash & Cash Equivalents (584.3)

Current Portion of LTD 7.1
LTD, Less Current Portion 1,782.5

Net Debt $1,205.3

Total Capitalization $5,714.8

COMPARABLE PUBLIC VALUATION
Regal
All in millions (except per Cinemark AMC Entertainment Entertainment Marcus
share amount) Holdings Holdings Group Corporation
Date: 7/13/2017 CNK AMC.N RGC MCS

Total Shares Outstanding 117.1 132.3 157.7 27.8

Stock Price $37.72 $21.55 $19.23 $28.80
Equity Market Cap $4,415.80 $2,850.16 $3,032.90 $799.75
Total Cash (584.3) (313.1) (408.8) (8.7)
Total Debt 1,789.6 4,578.6 2,221.3 283.4
Net Debt $1,205.30 $4,265.46 $1,812.50 $274.68
Non-Controlling Interest (0.5)
Total Capitalization $5,620.7 $7,115.6 $4,845.4 $1,074.4

EBITDA 2016 $632.0 $481.1 $574.2 $111.8

EV/EBITDA 2016 9.0 x 15.3 x 8.5 x 10.0 x

P/E 2016 17.6 20.6 17.9 21.6

Number of Screens 5,903 5,414 7,267

Investment Thesis:

Cinemark Holdings approach differentiates itself compared to its other theatre competitors.
They believe in expanding through exploring emerging markets, which they have had major
success in, along with growing their well-established United States business.
3rd biggest market share in the United States. Second biggest market share in Brazil (29%).
Biggest market share in Argentina (36%) and 2nd in Chile (36%).
With Thor, Justice League, and Star Wars: The Last Jedi still yet to release there is an attractive
film slate for the rest of 2017. Along with The Avengers: Infinity War, The Incredibles 2, and
Black Panther. 2018 is looking like another year of promising films.
Increasing investments into alcohol expansion and enhancing their food & beverage market.
Cinemark is estimating a 33% increase in alcohol expansion, along with a 60% increase in their
food & beverage market.
Cinemarks revenue is sustainable. Is currently trading at attractive multiples for investment
compared to AMC.N, RGC, or MCS.
Reason for Comment:

Cinemark announced their first quarter results in early May.

Revenues for the three months ended March 31, 2017 increased to $779.6 million compared to
the $704.9 million, which is a 10.6% increase.
Attendance increased 2.5%. Ticket prices reached $6.41 which is an increase of 6.7%. Also,
concession revenues per customer increased to $3.61, which is another increase of about 10%.
March 31, 2017, Cinemark operated 525 theatres with 5,984 screens. Have plans and
commitments to open 7 new theatres with 63 screens for 2017 and 12 new theatres with 106
screens for 2018.
Nancy Loewe elected to the board of directors, she is filling the position of Don Soderquist. She
brings a new perspective, along with extensive knowledge in strategy, and international
operations.

Risks & Challenges:

Sustainable yet not always predictable revenues due to never knowing how films will perform at
the box office. Low box office numbers have hurt theaters in the past.
The constant uncertainty with emerging markets and their economy,
Potential for slowing growth across the theatre sector to continue. Will put pressure on the
companies to create new ways to attract customers.

Theatres & Screens:

U.S Theatres 339

International Theatres 187
Future Theatres (a) 19

Adjusted Total Theatres 545

U.S. Screens 4,559

International Screens 1,344
Future Screens (a) 169

Adjusted Total Screens 6,072

Notes:

(a) Future screens for rest of 2017 and 2018.

Private Market Valuation:

I calculated 2018 PMV per share to be $51.91 to $57.86, which is a 35% increase from current prices.

Private Market Valuation 2018 2018

All in Thousands Except per share amount
Revenue $3,258.00 $3,258.00
EBITDA $696.0 $696.0
Margin% 21.4% 21.4%

Net Income $348.6 $348.6

Margin% 10.7% 10.7%

EPS $2.23 $2.23

Multiple 7 x 8 x

PMV $4,871.90 $5,567.89

Net Debt $1,205.3 $1,205.3

Equity PMV $6,077.20 $6,773.19

PMV/Share $51.91 $57.86

Discount 34.8% 50.2%