1. NYSE: MCS Analysts: Xiwei Ma Yongtong Li Li Ren Yuhao Qi
Presented April 20, 2017

2. Agenda Company Overview Macroeconomy & Industry Analysis1
Company Overview 2
Macroeconomy & Industry Analysis 3
Business Analysis 4
Financial Analysis 5
Multiple Valuation 6
Financial Projection 7
DCF Valuation 8
Recommendation

3. 1
Company Overview

4. Company Overview Basic Information Shareholdings Holder % Of CSO
Marcus, Stephen H. (Chairman)
17.367
Gershowitz, Diane Marcus (Director)
11.26
BlackRock, Inc. (NYSE:BLK)
8.129
Dimensional Fund Advisors LP
5.783
GAMCO Investors, Inc. (NYSE:GBL)
5.26
Northern Trust Global Investments
3.371
The Vanguard Group, Inc.
3.322
Wellington Management Group LLP
2.567
State Street Global Advisors, Inc.
1.628
Morgan Dempsey Capital Management, LLC
1.558
Founded in 1935
Headquarter in Milwaukee, Wisconsin
Leader in Lodging and Entertainments
Major Division
Forth Largest in U.S.
885 screens at 68 Locations in 8 states
Portfolio of 18 distinctive properties
Manage ~5,000 rooms in 9 states
Source: Investor Presentation 2017
Source: 10-K

5. Share Market Prospects
Key Statistics
Portfolio Weightage By Market Value
Current Stock Price
$31
Beta
1.03
Market Capitalization
$866 Mn
50-Day Moving Average
31.15
Total Enterprise Value
$1.18 Bn
200-Day Moving Average
29.64
P/E Ratio
23.05x
52 Week Range
$18.6 –$32.6
Source: Yahoo Finance
Share Price Performance
Source: Yahoo Finance

6. 2
Macro & Industry Analysis

7. Movie Theatre Industry
Disposable Income per Capita
Major Market Segments
Age 18-24
Age 40+
Age 25-39
Age 0-17
Source::IBISWorld
Source::IBISWorld
Revenue Segmentations
Industry Revenue
Others
Past 5 yr CAGR: 3.75%
Food and Beverage
Admissions
Source::IBISWorld
Source::IBISWorld

8. Movie Theater Industry
Key Factors
Threats of Substitutes: High
Technology Change
Others
Threats of Existing Players: High

9. Hotels and Resorts Industry
Major Market Segments
Domestic trips by US residents
Past 5 yr CAGR: 2.43%
Source::IBISWorld
Inbound trips by non-US residents
Past 5 yr CAGR: 5.36%
Source::IBISWorld
Source::IBISWorld

10. Hotels and Resorts Industry
Key Factors
Increasing trips
Low hotel development
Demand > Supply
Higher RevPAR
Room Revenue = # Rooms * RevPAR
= # Rooms * (Occupancy percentage * Average Daily room Rate)

11. 3
Business Analysis

12. Product & Service Theatre Hotel & Resort
68 theatres with a total of 885 screens
DreamLounger premium recliner seating
Offering food and beverage
UltraScreen DLX & SuperScreen DLX
$5 Tuesday promotion
Magic Movie Rewards, 2 million members
Eight company majority-owned and operate properties
Manage 10 properties for other owners
Own and manage around 5000 rooms
Food and Beverage
Source: MCS 10K
Source: Investor Presentation 2017,

13. Win market Theatre Segment
Source: Investor Presentation 2017,

14. Pursue Expansion Opportunities-Theatre
Acquisitions
Building new theatres
1. Over 50% of existing circuit came from acquisitions
2. Acquired 213 screens at 15 locations in F2016
3. Pursuing additional opportunistic acquisitions where we could create value by leveraging our innovative strategies
1. New 12-screen theatre in Sun Prairie, Wis. opened in April 2015
2. New 10-screen theatre in Shakopee, Minnesota under construction; opening Spring 2017
Source: MCS 10K

15. Hotel & Resort Segment
Source: Investor Presentation 2017,

16. Hotel & Resort Segment
Source: Investor Presentation 2017,

17. Experienced Management Team
Chairman of the Board since 1991
Joined the company in 1969
Served as CEO frim 1988 to 2009
Served as president from 1988 to 2008
Shares owned: 17.40%
President and CEO since 2009
Joined the company in 1992
Shares owned: 1.11%
CFO and Treasurer since 1996
Joined company in 1986
Shares owned: 0.19%
Experienced Management Team
Source: MCS Website,

18. SWOT Analysis Experienced management team
Long-standing company in industry
Long-term track record of continuous growth
Market leadership with national presence W
Properties are subject to risks relating to acts of god, terrorist activity and war
Sales highly depend on weather
Theatre segment depends on the quantity and quality of films T
intense competition
Sales made through third party internet travel intermediaries increases significantly
Increases sales of other entertainment departments O
Potential acquisitions
Stable economic environment
Management contracts with other parties

19. 4
Financial Analysis

20. Financial Analysis
Source: MCS 10K

21. 5
Multiple Valuation

22. Comparable Companies Source: Yahoo Finance, April 19, 2017
tewrLLTAhVJxYMKHWeYD2AQ_AUICygE&biw=1163&bih=559#imgrc=DpANFqbI_BlYVM:

23. Financial Ratios
Source: Yahoo Finance, April 19, 2017

24. Multiples Valuation
Appreciation: Median to high Profitability and adequate long-term liquidity
Punishment: Low current liquidity
Source: Yahoo Finance, April 19, 2017

25. 6
Financial Projection

26. Assumption
Theatre:
it is critical to figure out profitable acquisition opportunity
Hotel & Resort:
Faster increase in Revenue Per Available Room than nation and competitive sets
Involve in hotel managing activities, which would save cost and broader profit margin
CAPEX: a decreasing % of Revenue because of increasing hotel managing activities
Source: MCS 10K

27. 7
DCF Valuation

28. Discount Rate Calculation
WACC Method
Annual Return Method
CAPM
Beta
1.03
Risk Free Rate
3.0%
Market Premium
7.0%
10.2%
Annual Realized Returns
Year
MCS
S&P 500 5
19.37%
11.00% 4
26.65%
10.97% 3
20.63%
9.06% 2
24.14%
5.86% 1
60.30%
15.04%
Average
30.22%
10.39%
WACC
Weighted
Cost Of Equity
10%
42.98%
Cost of Debt (after tax) 2%
57.02% 5%
Business Premium Risk 1%
Discount rate 6%
Extremely high annual return in 2016
Might not be continuous in the future
Weight
10%
9.0%
85%
30.2%
15%
Discount Rate
Source: April 19, Bloomberg

29. DCF Valuation Current Stock Price: $31.00 Perpetuity Method
Exit Multiple Method
Exit Multiple Method (mm)
Terminal Year EBITDA $
Comparable Companies EBITDA multiples
12.00
Terminal Value
$ ,895.94
Implied Enterprise Value
$ ,275.54
Less Net Debt $
Implied Equity Value $
Shares Outstanding
27.72
Implied Share Price $
Perpetuity Method (mm)
PV of total Free Cash Flow $
PV of Terminal Value $
Implied Enterprise Value $
Less Net Debt $
Implied Equity Value $
Shares Outstanding
27.72
Implied Share Price $
Current Stock Price: $31.00

30. 8
Recommendation

31. Watch list Recommendation Experienced market player+
Experienced market player +
Skillful management team +
Growing market and increasing customer demand
Watch list -
Weak DCF valuation results -
Intense competition and mature industry -
Business uncertainty and high business risks