RHB Research lowers target price for Media Prima to 59 sen

KUALA LUMPUR (July 19): RHB Small Cap Asean Research has maintained its “buy” rating on Media Prima Bhd at 38 sen with a lower target price (TP) of 59 sen (from 87 sen) and said Media Prima’s leading exposure to free-to-air (FTA) advertising expenditure (adex) renders it susceptible to a slowdown if overall adex sentiment takes a turn for the worse.

In a note on Tuesday (July 19), the research house pared down Media Prima’s FY22-FY24F core earnings to reflect weaker ad spending propensity.

RHB Research said there is some correlation between the performance of media stocks and polling dates, but the relationship is not entirely conclusive.

“We note investors were better off accumulating media stocks in the run up to GE14, with the best gains notched three months thereafter.

“For GE13, media stocks saw optimal gains three to six months into the polling day.

“Discerning the performance of media stocks for the upcoming polls is as good as hazarding a guess on the outcome of GE15, in our view

“Our TP is now pegged to 0.6 times FY23F P/BV mean (one times previously), at -1SD below historical mean and 11 times FY23 EPS (2% ESG premium imputed),” it said.