Media Chinese’s (MCIL) full-year FY12 core earnings of
RM194m were largely in line with our and consensus estimates. It also declared
a second interim dividend of 4.6 sen, bringing the total dividend declared in FY12 to 8.1 sen, which translates into a lucrative dividend
yield of 7%. We are upgrading our revenue and earnings forecast for FY13
slightly by 0.7% and 2% respectively in view of the upcoming ad-friendly
events in 2HCY12. We continue to
like the management’s prudent cost
control efforts and the healthy adex growth for the Chinese newspaper segment.
As such, we reiterate our BUY call with
a FV of RM1.60 (previously
RM1.54) based on 13x FY13 PER. MCIL remains our top sector pick.
A stronger year as
expected. MCIL posted a strong set of results which saw revenue, PBT and
core earnings rising by 7%, 16% and 9% to RM1.5bn, RM260m and RM194m respectively.
The group’s core business of publishing and printing recorded a healthy 6%
y-o-y growth, attributed mainly to its sturdy Malaysia operations which
experienced a 7% y-o-y growth. Its Hong Kong operations also improved 6% y-o-y
thanks to the higher ad-dollar activities emanating from the property sector.
MCIL’s travel segment also grew 15% y-o-y with a strong surge in demand for its
long-haul tours to destinations such as Europe and Australia. On a quarterly
basis, the group’s revenue and core earnings slipped by 18% and 22%, which we
deem in line with our expectations owing to seasonality factors. The
small gap between Chinese New Year in Jan 2012 and Christmas in Dec
2011, as well as the long holiday season had shortened the advertising
& promotion window for advertisers. Note that MCIL has reported its numbers based on an exchange
rate of RM3.06 as at 31 March 2012. If we were to use the average exchange rate
of RM3.11 for FY12, revenue and core earnings would come in at RM1.48bn and
RM197m (2% and 1.5% higher respectively). Please see results Table below
Margins improved,
outlook remains healthy. MCIL’s EBITDA and PBT margins expanded by 120bps
and 200bps respectively, thanks to the healthy adex growth for the Chinese
segment and management’s prudent cost control efforts. Moving forward, we foresee
that the group will continue to report healthy growth on the back of aggressive
advertising and promotion activities among hypermarkets and fast-moving
consumer goods companies during upcoming major ad-friendly events such as Euro
2012 and the 2012 Olympics. We also applaud MCIL for coming up with creatively
bundled offerings, especially for ad-friendly sport events, whereby MCIL
organizes crowd-pulling events for clients who advertise on its publications to
increase the brand visibility of their products.
Source: OSK
No comments:
Post a Comment