Journey to Wealth
Media Chinese Intl (MCIL) - Within expectations
Period 1Q13
Actual vs. Expectations
1Q13 net profit of USD15.3m (or RM48.7m) came in within our expectation and accounted for 24.0% and 25% of ours and the street's FY13 full year estimates of USD64m and USD61m respectively.
Dividends No dividend was declared. None was also expected as the group typically rewards its shareholders semi annually. The group has a dividend policy of distributing 30%-60% of PAT.
For the full financial year, we expect the group to distribute 2.3 U.S. cents (or RM0.07 sen) dividend on top of its recently announced special dividend of RM0.393 sen (based on RM3.02 to USD1), which will bring the full year dividends to RM0.463 sen.
This will translate to a dividend yield of 30% for FY13.
Key Result Highlights
YoY, 1Q13 revenue rose by 4.4% to RM391.4m due mainly to the strong growth in its tour business (+28%) as well as a moderate growth in the advertising revenue from the publishing and printing business. In tandem with the growth in the revenue and a lower effective tax rate of 24.4% (vs. 27.8% previously), the group's NP rose by 13% to RM43.1m.
QoQ, despite revenue having increased by 19% as a result of the strong performance from the tour business (+328%), a higher operating cost, however, eroded the group's EBIT margin to 16.9% (vs. 18.9% previously). This, together with the higher taxation rate of 24.4% (vs. 20.2% previously), resulted in the overall MEDIAC's NP to come in relatively flat at RM48.7m (-1%).
Outlook Cautiously optimistic. We are expecting the adex sentiment to improve in 3Q12 due to the London 2012 Olympics and Hari Raya festival. The 4Q12 outlook, however, remains bleak at this juncture given the uncertainty of the General Election. We believe advertisers are still adopting a 'saving for the rainy days' approach.
Change to Forecasts
FY13-FY15 earnings forecasts remain unchanged.
Rating Maintain OUTPERFORM
Valuation No changes in our MEDIAC TP at RM1.80, based on a targeted FY13 PER of 15.7x (+2SD).
Risks CY12 gross adex growth coming in below our expectation of RM11.8b (+10.0% YoY).
Source: Kenanga
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