Stock Name: MEDIA
Company Name: MEDIA PRIMA BHD
Company Name: MEDIA PRIMA BHD
| Research House: OSK | Price Call: BUY | Target Price: 3.01 |
Media Prima's (MPR) results were commendable, with revenue of RM1.62bn and coreearnings of RM207.7m coming in within our estimates but beat consensus forecasts by 11%.The group has proposed another final single-tier dividend of 5.0 sen, bringingits total payout to 16.0 sen in FY11. This is based on a higher dividendpayout ratio of 53% vs 41% in FY10. Meanwhile, revenue at its Free-to-Air (FTA)TV and print media segments rose 7.5%and 6.4% y-o-y respectively. We tweak up our earnings for FY12-FY13 by 4% and6% respectively on firm consumer spending on the home front and the upcoming adex-friendly 2012 Olympics and Euro2012 sports tournament. After the earnings revision, our FV goes up to RM3.01 from RM2.89, basedon 16x FY12 PER. Maintain BUY.
Healthy across theboard. MPR's revenue, EBITDA and core earnings were within our expectationgrew by 5%, 3% and 4.4% y-o-y to RM1.62bn, RM404m and RM207.7m respectively. Revenue from the group's core business, TVN(42.6% of FY11 total revenue), improved further by 6.4% y-o-y backed bystrong adex growth in 1H and MPR'sprogress in creating content. As such, the group's (FTA) TV segment continued tohold pole position as the nation's largest TV operator, with its FTA TV channels commanding the lion's share of 47% in terms of viewership. Revenue from its largest contributor, PrintMedia (43% of FY11 total revenue), grew 7.2% y-o-y, led by its flagshippublicationsHarian Metro and Berita Harian, snaring a whopping 44% and 24% share respectively of readership. MPR's outdoor media segment also reported 10% y-o-y revenuegrowth to RM144m. We believe the group will continue to enlarge its footprint withinthis segment as there are still plenty of unutilized strategic slots along the expressways.
Improvedprofitability. On a quarterly basis, the group's revenue of RM429m was higherby 4% y-o-y and 3% q-o-q on the back of resilient growth in its overallbusiness,with the TV segment, radio and outdoor, reporting +5%, +22% and 3.4%q-o-q growth to RM187m, RM17m and RM39m respectively owing to the Christmasfestive season and the country's year-end sales. EBIT, PBT and core earningssurged 31%, 36% and 41% respectively due to the group's prudent costcontrols, which resulted in healthier profits. Continuing with itsgenerosity this year, MPR has proposed to pay another final single-tierdividend of 5.0 sen for the quarter, bringing its total FY11 payout to 16.0sen. This is based on a higher dividend payout ratio of 53% vis-''-vis 41% inFY10, translating into a healthy dividend yield of 6%.
Valuations &Recommendations
Maintain BUY, with higher FV. We remain positive on thegroup's prospects going forward and believe its core divisions of TVN, printand outdoor will continue to chalk up revenue and operating profit growth in anticipation ofthe upcoming adex-friendly events such as 2012 Olympics and Euro 2012tournament. We see a high possibility of the group offering more cross-platformadvertising packages to better meet customers' needs going forward. Hence, we reiterate our BUYcall for MPR, with our FV raised from RM2.89 to RM3.01, based on 16x FY12 PER,following the upward revision in our core earnings estimates by 4% -6% forFY12-13 respectively.
Source: OSK188
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