- We re-affirm our BUY rating on Media Chinese International
Ltd (MCIL), with an unchanged fair value of RM1.37/share following the release
of its 4QFY12 results.
- Pending an analyst briefing to be held this morning, we
maintain our earnings forecasts at and we have introduced FY15F earnings at
RM220mil.
- MCIL’s FY12 earnings were way above expectation. MCIL
reported a net profit of RM197mil for FY12, which was 6% and 222% ahead of our
forecast and consensus, respectively.
- Earnings rose by 17% YoY, stemming from its core business
– printing and publishing. This segment
continues to maintain a healthy growth momentum, growing by 6% driven by advertising
revenue.
- Compared to the same quarter in previous year, turnover
fell by 3% due to a change in “revenue presentation” in the travel segment’s
ticketing sales. Growth would have been 4% if that was excluded.
- On a sequential basis, turnover dropped by 18% due to a
change in “revenue presentation” for the tour segment and 4Q being a seasonally
slower period as most advertisers adopt a cautious approach. The travel segment
hit a record pre-tax profit of RM214mil, backed by its long-haul tour business,
which is operated via Charming Holidays and Delta Group.
- Management declared a tax-exempt second interim dividend
of 4.6 sen/share. In total, MCIL paid a dividend of 8.3 sen/share for FY12. As
FY12 turned out to be a record-breaking year, FY12 dividend payout represents a
38% increase compared to FY11.
- With major sporting events and general election just
around the corner, amid uncertainties in the global economic environment,
management expects local business and consumer spending to be prudent.
- MCIL’s balance sheet remains healthy with net cash
position growing 8% QoQ to RM413mil as at end-FY12 from RM384mil in 3QFY12. We
continue to like MCIL for its dominance in the Chinese newspaper segment in
Malaysia (87% of market share) and superior pricing power ad rates – the second
highest industry-wide.
Source: AmeSecurities
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