Malaysia’s advertising expenditure (adex) inched up by a smaller than expected 2.0% y-o-y in CY12, mainly due to weaker adex in the newspaper segment, which slipped 1.2% y-o-y. In contrast, adex for free-to-air (FTA) TV and radio grew by 5.2% y-o-y and 5.3% y-o-y respectively. We expect advertisers to continue to rein in advertising and promotion (A&P) spending, possibly due to sluggish consumer sentiment. Hence, we remain NEUTRAL on the media sector.
CY12 numbers below expectations. According to The Nielsen Co, 4QCY12 adex came in at RM2.3bn, up 7.2% y-o-y and 5.2% q-o-q. The quarter turned out to have been 2012’s strongest amid the typical year-end rush on the part of advertisers to exhaust their advertising budgets. However, the cumulative CY12 adex grew by a disappointing 2.0% to RM8.4bn, which was below our estimate. By segment, free-to-air (FTA) TV adex climbed 5.2% y-o-y while that of newspapers dipped 1.2% y-o-y.
BM, Chinese papers in the lead. Newspapers adex income contracted 1.2% y-o-y in CY12 on the back of a 5.1% decline in the adex for the English newspapers. BM and Chinese publications, on the other hand, saw their adex ticking up 1.7% and 1.1% respectively. On a y-o-y basis, Media Prima and MCIL expanded their market shares by 143.6 bps and 26.6 bps respectively, while their counterparts saw a 170.2 bps dip in total market share.
FTA TV adex improves. Total FTA TV adex improved 5.2% y-o-y in CY12, with three out of four of Media Prima’s channels registering positive adex growth except NTV7, which saw adex shrink 3.7% y-o-y. Nevertheless, Media Prima continued to dominate the local airwaves with an 86.4% market share.
Maintain NEUTRAL. We are maintaining our NEUTRAL stance on the media sector on expectation of tepid growth over the next two quarters. We make no changes to our NEUTRAL calls on: (i) MCIL (NEUTRAL; FV: RM1.17) as we stay cautious on the impact of its RM500m in debts on its bottomline, (ii) Media Prima (NEUTRAL; FV: RM2.39) due to its exposure to the more-volatile TV segment, and (iii) Catcha Media (NEUTRAL; FV: RM0.43) as the company may need more time to nurture its burgeoning online media and e-commerce businesses. Lastly, we keep our MARKET PERFORM recommendation on Astro (MP; FV: RM3.35) for the company’s pay-TV business model, which may somewhat cushion the impact of the slowdown in adex.
CY12 numbers below expectations. According to The Nielsen Co, 4QCY12 adex came in at RM2.3bn, up 7.2% y-o-y and 5.2% q-o-q. The quarter turned out to have been 2012’s strongest amid the typical year-end rush on the part of advertisers to exhaust their advertising budgets. However, the cumulative CY12 adex grew by a disappointing 2.0% to RM8.4bn, which was below our estimate. By segment, free-to-air (FTA) TV adex climbed 5.2% y-o-y while that of newspapers dipped 1.2% y-o-y.
BM, Chinese papers in the lead. Newspapers adex income contracted 1.2% y-o-y in CY12 on the back of a 5.1% decline in the adex for the English newspapers. BM and Chinese publications, on the other hand, saw their adex ticking up 1.7% and 1.1% respectively. On a y-o-y basis, Media Prima and MCIL expanded their market shares by 143.6 bps and 26.6 bps respectively, while their counterparts saw a 170.2 bps dip in total market share.
FTA TV adex improves. Total FTA TV adex improved 5.2% y-o-y in CY12, with three out of four of Media Prima’s channels registering positive adex growth except NTV7, which saw adex shrink 3.7% y-o-y. Nevertheless, Media Prima continued to dominate the local airwaves with an 86.4% market share.
Maintain NEUTRAL. We are maintaining our NEUTRAL stance on the media sector on expectation of tepid growth over the next two quarters. We make no changes to our NEUTRAL calls on: (i) MCIL (NEUTRAL; FV: RM1.17) as we stay cautious on the impact of its RM500m in debts on its bottomline, (ii) Media Prima (NEUTRAL; FV: RM2.39) due to its exposure to the more-volatile TV segment, and (iii) Catcha Media (NEUTRAL; FV: RM0.43) as the company may need more time to nurture its burgeoning online media and e-commerce businesses. Lastly, we keep our MARKET PERFORM recommendation on Astro (MP; FV: RM3.35) for the company’s pay-TV business model, which may somewhat cushion the impact of the slowdown in adex.
Source: OSK
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