My Day to Day Analysis

SENI JAYA CORPORATION – Ample Room of Growth Ahead

Publish date: Thu, 07 Jul 2022, 04:03 PM

·         According to MAGNA’s “Global Ad Forecast” report, the firm predicts that media advertising revenue to grow 9% YoY to $816 billion in 2022, and another 6% YoY in 2023 respectively.

·         Digital advertising sales will grow by +13% this year to reach 65% of total ad sales. Digital Video will be the fastest-growing ad format (+16%) followed by Search (+15%), and Social (+11%).

·         The advertising revenues of traditional media companies will grow in most media: Television and Audio (both +4%), Out-of-Home (+10%), while Print advertising will decline slightly (-3%).

·         Out-of-Home and digital advertising specialist SENI JAYA remains as our top pick due to aggressive expansion of asset portfolio as well as M&A activities despite a slower market.

2021 Recap. The year had been very significant for the group as the company had acquired Topper Media who held 40% direct investment in Noisy Sherbert Sdn Bhd as their maiden venture into the pDOOH business. SENI JAYA also acquired 55% equity of Andaman Media, Saakti Billboards and Tanjong Jernih to emerge as both a new major shareholder and venture partner.

New Substantial Shareholder. Although most had missed out the message, Kenanga Growth Fund, one of the best ever performing fund had emerged as the substantial shareholder of the company dated 7th September 2021.

Extensive Portfolio of Client. The company proud itself for its full-fledge OOH solutions, with clients such as Coca Cola, Wall’s, Disney+, GrabFood, Lazada and more. The strong portfolio of the company had provided ease of new client penetration due to the market presence of SENI JAYA.

Outlook. The group had embarked on their OOH transformation journey in 2021, and they had managed to rebuild the OOH assets with greater comprehensiveness. The management expects the company to be well-positioned to capitalize on the favorable industry trend ahead. They also expect the company to enter into a new phase of business transformation journey involving more concession-based projects in 2022. Based on the aforementioned statistics, we are confident that SENI JAYA will be having a record year in FY23/24.

BUY call initiated with TP of RM3.63. Based on its current growth plan as well as the bright industry outlook of OOH recovery coupled with pDOOH income generating-capabilities, we are expecting a 14.52 EPS in FY23 with forward 25x valuation. The higher EPS in absolute number is contributed by the lower total number of shares of the company.

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