Media Prima’s (MPR)
results were commendable, with revenue
of RM1.62bn and core
earnings 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, bringing
its total payout to 16.0 sen in FY11. This is based on a higher dividend
payout 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% and
6% respectively on firm consumer spending
on the home front and the upcoming adex-friendly 2012 Olympics and Euro
2012 sports tournament. After the earnings revision, our FV goes up to RM3.01 from RM2.89, based
on 16x FY12 PER. Maintain BUY.
Healthy across the
board. MPR’s revenue, EBITDA and core earnings were within our expectation
grew 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 by
strong adex growth in 1H and MPR’s
progress in creating content. As such, the group’s (FTA) TV segment continued to
hold 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, Print
Media (43% of FY11 total revenue), grew 7.2% y-o-y, led by its flagshippublications
Harian 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 revenue
growth to RM144m. We believe the group will continue to enlarge its footprint within
this segment as there are still plenty of unutilized strategic slots along
the expressways.
Improved
profitability. On a quarterly basis, the group’s revenue of RM429m was higher
by 4% y-o-y and 3% q-o-q on the back of resilient growth in its overall
business,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 Christmas
festive season and the country’s year-end sales. EBIT, PBT and core earnings
surged 31%, 36% and 41% respectively due to the group’s prudent cost
controls, which resulted in healthier profits. Continuing with its
generosity this year, MPR has proposed to pay another final single-tier
dividend of 5.0 sen for the quarter, bringing its total FY11 payout to 16.0
sen. This is based on a higher dividend payout ratio of 53% vis-à-vis 41% in
FY10, translating into a healthy dividend yield of 6%.
Valuations &
Recommendations
Maintain BUY, with higher FV. We remain positive on the
group’s prospects going forward and believe its core divisions of TVN, print
and outdoor will continue to chalk up revenue and operating profit growth in anticipation of
the upcoming adex-friendly events such as 2012 Olympics and Euro 2012
tournament. We see a high possibility of the group offering more cross-platform
advertising packages to better meet customers’ needs going forward. Hence, we reiterate our BUY
call 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% for
FY12-13 respectively.
Source: OSK188
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