OUTPERFORM
Target Price: RM1.80
Media Chinese International (“MEDIAC”) is scheduled to release its 1QFY13 result on 29 August. We expect the group to report a net profit of USD15m (or RM45.3m based on an exchange rate of RM3.02 to USD1.00), which would account for about 24% and 25% of ours and the consensus full year estimates, respectively. Management has reiterated its target to complete its recently announced travel asset spin-off by year-end. The recent proposed spin-off is expected to generate some exceptional gains, which we believe could be used by the company to further reward shareholders in the future although the quantum is uncertain at this juncture. MEDIAC has also lately formed a new subsidiary in Indonesia, which likely indicates that the group intends to take a more active role in its Indonesia’s venture – Indonesian Sin Chew Daily (“ISCD”). We reiterate our OUTPERFORM rating on MEDIAC with an unchanged target price of RM1.80 based on a targeted FY13 PER of 15.7x (+2SD).
Source: Kenaga
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