SJC (9431) – Light at the End of the Tunnel

After a long, long rest, SJC – being one of the most underestimated GEM in the market had finally gained some traction and investor attention to the company. Of course, there is always a reason for the shift of demand of supply in the share market, there must be an untold story behind SJC as we can see the company is moving upwards despite suffered losses in the last few quarters.

Today, we will talk about the key drivers for the share price movement.

Positioned as the direct beneficiary for reopening of economic sectors. Being a dynamic Out-of-Home (OOH) media specialist and market leader, the company had been operating in the sector for more than 38 years across 25 sectors, with more than 100 clients. The company offers a wide spectrum of advertising solutions ranging from static billboards, digital billboards, and programmatic Digital OOH (pDOOH). To put this in plain, simple words, the busier the traffic, the higher the demand for SJC’s offerings, hence why the company is well positioned as the direct beneficiary for reopening of various economic sectors.

Strategic partnerships with other OOH companies. Speaking of leverage, we could say that SJC had nailed it in some sense. The company is currently in collaboration with Unilink Outdoor, Vision OOH, Big Tree Seni Jaya, CSSB Outdoor as well as Andaman Media. As you may have guessed, the OOH business model requires certain asset ownership, but one company can only go so far without over-geared and hurt the balance sheet. We liked SJC for leveraging its strategic partners assets to maximize the OOH exposure for its clients. Most of SJC clients are in the B2C industry.

Pioneering pDOOH with the largest e-hailer in Malaysia. Some of you may have already seen the small digital billboard installed on e-hailing vehicles in Klang Valley region. Apart from the traditional static billboards and digital billboards, a mobile billboard with customizable ads based on geo targeting, time slot management, temperature or even weather. We believed that pDOOH will change the landscape of OOH as a whole.

An example of pDOOH application.

Loss no more, light at the end of the tunnel. Based on our channel check, SJC had received good respond in the month of October and November for OOH solutions as we are embracing endemic. Barring any unforeseen circumstances, the company should recover gradually in the next financial year due to increase demand and better utilization of the billboard assets. The expansion plan into digital billboards and pDOOH will be an additional revenue generator for the group. Hence, we remain very positive for the prospects of the group in 2022.

That is all for today, and we will share more of SJC’s valuation and a detailed analysis of the latest financial performance for the group.

Cheers.