Thursday, 31 May 2012

Media Chinese Intl -OUTPERFORM- 31 May 2012


Period   4Q12

Actual vs.  Expectations

FY12 net profit of RM194m (or USD63m) came in 9.6% above our expectation but in line with the consensus’ estimate. The main culprits between ours and the actual number were 1) lower than expected distribution and administration costs and 2) difference between our in-house USD to RM assumption against the company (RM3.05 vs. RM3.0645).      

Dividends  Declared US1.448 cents (or RM0.04575 sen) second interim dividend, bringing the full-year dividends to US2.65 cents (or RM0.083 sen) and translating into a dividend payout ratio of 70.7%.

Note that the group’s FY12 dividend payout ratio was higher than its dividend policy, which is set to distribute 30%-60% PAT to shareholders.  

Key Result Highlights
YoY, revenue rose by 6% to RM1.45b due mainly to the increase in advertising revenue and travel segment’s turnover. Despite recording a moderate growth in its  turnover, the group’s NP has grown by 15% to RM194m as a result of lower fixed and operating costs. 

QoQ, revenue was reduced by 15% to RM318m, no  thanks  to  the  drop  in  tour  revenue  as  well  as a seasonally slow period for advertising. Thus, leading its NP to drop 19% QoQ. 

Outlook  Cautiously optimistic. We are expecting the adex sentiment to improve from 2Q12 onwards driven by scheduled major sport events and a potential General Election.

Change to Forecasts
We have increased our FY13 NP forecast by 6.5% to RM188m after lowering the distribution and administration costs.  Our FY14 NP forecast, however, remains unchanged. 

Rating  Maintain OUTPERFORM

Valuation   We have raised our TP to RM1.36 (from RM1.30 previously) after rolling over our base year to FY13 with a targeted PER of 12.5x (-1 SD below its mean). 

Risks  CY12 gross adex growth coming in below our expectation of RM11.9b (+11.1% YoY).  

Source: Kenanga

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