Period 1Q13
Actual vs. Expectations
1Q13 net profit of
USD15.3m (or RM48.7m) came in within our expectation and accounted for 24.0% and
25% of ours and the street’s FY13 full year estimates of USD64m and USD61m
respectively.
Dividends No
dividend was declared. None was also expected as the group typically rewards
its shareholders semi annually. The group has a dividend policy of distributing
30%-60% of PAT.
For the full
financial year, we expect the group to distribute 2.3 U.S. cents (or RM0.07
sen) dividend on top of its recently announced special dividend of RM0.393 sen
(based on RM3.02 to USD1), which will bring the full year dividends to RM0.463
sen.
This will translate to a dividend yield of 30% for FY13.
Key Result Highlights
YoY, 1Q13 revenue
rose by 4.4% to RM391.4m due mainly to the strong growth in its tour business
(+28%) as well as a moderate growth in the advertising revenue from the
publishing and printing business. In tandem with the growth in the revenue and
a lower effective tax rate of 24.4% (vs. 27.8% previously), the group’s NP rose
by 13% to RM43.1m.
QoQ, despite revenue
having increased by 19% as a result of the strong performance from the tour business
(+328%), a higher operating cost, however, eroded the group’s EBIT margin to 16.9%
(vs. 18.9% previously). This, together with the higher taxation rate of 24.4%
(vs. 20.2% previously), resulted in the overall MEDIAC’s NP to come in
relatively flat at RM48.7m (-1%).
Outlook Cautiously optimistic. We are expecting the
adex sentiment to improve in 3Q12 due to the London 2012 Olympics and Hari Raya
festival. The 4Q12 outlook, however, remains bleak at this juncture given the
uncertainty of the General Election. We believe advertisers are still adopting
a ‘saving for the rainy days’ approach.
Change to Forecasts
FY13-FY15 earnings
forecasts remain unchanged.
Rating Maintain OUTPERFORM
Valuation No changes
in our MEDIAC TP at RM1.80, based on a targeted FY13 PER of 15.7x (+2SD).
Risks CY12
gross adex growth coming in below our expectation of RM11.8b (+10.0% YoY).
Source: Kenanga
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