Media Prima (MPR) posted a net profit of RM14.1m for 1QFY24. Results were within our expectations, accounting for 25% of full-year estimates but surpassing consensus forecasts. Owing to the change in financial year end, we compare 1QFY24 against performance of the July - September 2022 quarter. Revenue dropped 9.8%, mainly dragged by weaker contribution from broadcasting and home shopping segments while net profit jumped 96% on the back of lower finance and tax cost. On a QoQ basis, net profit rose 59% due to lower depreciation and amortization charges. We make no changes to our FY24-26F earnings forecasts, with an unchanged TP of RM0.48, based on 0.7x PBR. Maintain Neutral on MPR.

• 1QFY24 revenue fell 4.1% QoQ to RM213.9m, mainly due to lower broadcasting and home shopping revenue. Publishing segment was the best performer chalking an 11% growth due to higher advertising and printing revenue. Digital media also reported higher revenue, though marginal at only 2% on higher digital advertising.

• 1QFY24 net profit jumped on lower depreciation and amortization cost. Net profit rose from RM8.8m in the previous quarter to RM14.1m mainly due to a 28% drop depreciation and amortization cost.

• Outlook. Based on Statista’s projection, Malaysia’s advertising market is expected to hit USD1.53bn in 2023 with TV & radio advertising accounting for the bulk of market volume at about 26%. However, growth in this segment is projected to be stagnant though digital and search advertising should dominate and chalk a more significant growth going forward. Some industry data is suggesting that the size of digital advertising is estimated to be three times the size of traditional advertising in the future. As such, it is vital for local broadcasters and media companies to reinvent as well as invest in digitization to maintain their competitiveness and relevance in the advertising industry.

Source: PublicInvest Research - 30 Nov 2023