Journey to Wealth
Media Chinese Intn'l - Strong adex spending BUY
We reiterate our BUY recommendation on Media Chinese InternationalLtd (MCIL), with a higher DCF-based fair value of RM1.37/share versusRM1.30/share previously.
MCIL's 9MFY12 earnings of RM155mil outperformed our full-yearforecast by 4%. Annualised earnings were at 24% above consensus.
We revise upwards our earnings estimates for FY12FFY13F by25%, owing to stronger-than-expected adex volume moving forward.
MCIL's 3Q net profit rose 32% QoQ to RM63.1mil, despite a slightdrop in turnover by 4.4%. The improved performance was largely attributed torobust sales contributed by acceleratedadex spending and cost containment efforts.
So far, 3Q has been the strongest quarter with a 34.9% QoQjump in pre-tax profit. Publishing and printing performed well, increasing by8.7%. Advertising growth was boosted by improvements in volume and rate,despite the economic uncertainty and advertising volatility in the local market.
On a YoY basis, MCIL recorded a 6% rise in net profit for 9MFY12due to a higher turnover at 9%. This strong growth was mainly attributable toadvertising revenue from national advertising, property sector and luxuryproducts and tour revenue especially in the long-haul tours.
We understand that publishing and printing in Hong Kong seta record for MCIL. Print advert is fully booked for CY12 for a magazine called'MING Watch' in Hong Kong and China. 'MING Watch' is a watch magazine featuringthe latest news on high-end watch trend.
Nevertheless, adex outlook in Malaysia remains healthy, withthe potential election in CY12 to bode well for the sector. Other regionalevents such as elections in the US, China, Taiwan, HK and the Olympics wouldalso support adex spending.
Management expects escalating costs due to inflation, especiallyfor newsprint price and staff costs. Newsprint price is expected to rise due toan increasing demand in 1HFY13F as many elections are taking place globally.
We like MCIL due to the group's monopolistic position withinthe Chinese language print segment in Malaysia (87% of market share) andsuperior pricing power for adrates ' the second highest industry wide.
Source: AmeSecurities
Related Stocks
| Chart | Stock Name | Last | Change | Volume |
|---|
Market Buzz
More articles on Journey to Wealth
Ekovest: No plan to launch another offer for Iskandar Waterfront City
Created by kiasutrader | Mar 29, 2018
Kenanga Research - On our Portfolio - Parliament dissolution around the corner?
Created by kiasutrader | Mar 25, 2013
Plantation Sector - Proposed accounting standard scrapped OVERWEIGHT
Created by kiasutrader | Mar 25, 2013
Pavilion Reit - Limited upside, earnings upside have been priced in HOLD
Created by kiasutrader | Mar 25, 2013
Discussions
Be the first to like this. Showing 0 of 0 comments
Post a Comment
Featured Posts
Introducing MY's First IPO Fund for Sophisticated Investors!
New Update. Discover investment communities that resonate with your ideas
M & A Value Partners IPO Equity Fund has been launched - Targeted 13% Return p.a
Latest Videos
Apps
Top Articles
1
2
3
save malaysia!
Visa-free travel to China extended for Malaysians to 30 days
4
Good Articles to Share
5
Good Articles to Share
Four convicted in Spain over homophobic murder that sparked nationwode protests
6
Good Articles to Share
7
Good Articles to Share
What’s behind the slew of restaurant bankruptcies in 2024? Experts unpack the problems
8
Good Articles to Share
#
Stock
Score
Daily Stocks
Stock Name
Last
Change
Volume
Stock Name
Last
Change
Volume
Stock Name
Last
Change
Volume
Featured Advertisers / Partners
Ride The Bull Short The Bear
CS Tan
4.9 / 5.0
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
