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Author: PublicInvest   |   Latest post: Wed, 11 Dec 2019, 9:46 AM

 

Media Prima Berhad - Lifted By One-Off Gain

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Media Prima (MP) registered 4QFY18 net profit of RM79.2m which was mainly lifted by one-off gain from the sale and lease back exercise. Taking out these one-off items, the Group’s core net loss in FY18 is estimated at RM95.9m (+37.9% YoY) which was weaker than both our and consensus estimates. Again, we are still cautious with the structural decline of the traditional media business despite the Group’s narrowing core net loss. Its key segments are mostly still experiencing revenue drops between 7% and 27% YoY. Our P/BV based TP is unchanged at RM0.43. Maintain Neutral.

  • 4QFY18 revenue rose 7% QoQ to RM19.1m driven by stronger traditional and digital spend during the quarter in addition to higher contribution from commerce revenue. TV networks’ revenue increased by 13% QoQ due to higher advertising revenue while publishing saw its revenue drop 14% due to decline in traditional circulation and advertising revenue. As for other divisions, out-of-home revenue improved by 15%, radio networks revenue higher by 14%, digital media revenue jumped 22%, content creation revenue rose 3% and home shopping revenue was higher by 10% due to growth in products offering and better presence.
  • Focus on digital and e-commerce segment. We understand that the Group will focus on the digital and e-commerce segment as these two segments are said to provide the biggest growth to MP. In the briefing after the results announcement, management guided that they are expanding the digital reach segment through acquisitions. The e-commerce platform, ‘Cj Wow Shop’ is still not profitable currently but management is confident that it will breakeven and expects it to contribute by the current or next quarter. We understand that it will allocate more hours on TV for Cj Wow Shop to attract more customers. As for MSS progress, management is looking to reduce staff cost by lowering the number of staff gradually. Current staff count is 3807 from a peak of approx. 4500.

Source: PublicInvest Research - 28 Feb 2019

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