Journey to Wealth
Media Chinese Int'l - Capital initiative plan on the cards?
News Media Chinese Int'l (MEDIAC) has requested for a suspension of its stock trading on Friday but yet to make any announcement thus far. Nevertheless, we understand that the company will make a material announcement today.
Comments While we are not exactly certain of the nature of the material announcement above, we suspect that it could relate to potentially cash/stock dividend/capital initiative plan.
MEDIAC has RMRM488.1m and RM860.6m in its retained earnings and share premium accounts as of 4Q12, which if were to be distributed in total each, would amount to 28.9 sen/share and 51.0 sen/share respectively.
Outlook Remain cautiously optimistic on adex growth.
Forecast No changes in our FY13-FY14 earnings forecasts.
Rating Maintained OUTPERFORM
We continue to favour MEDIAC over other media companies due to 1) leading position in Malaysia Chinese media segment; and 2) natural hedge in forex exchange given its USD exposure in both revenue and cost segments.
Valuation Our MEDIAC Target Price of RM1.33 (based on a targeted FY13 forward PER of 12.2x (+1.0 SD) is currently under review. Should the upcoming announcement be related to any form of cash/stock dividend/capital initiative plans, we believe it could be a major catalyst for the stock and drive the share price up to RM1.71 (+2.0 SD)
Risks Slower than expected June adex may cause us to review our FY12 adex growth assumption, which is currently set at +11.1% YoY.
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