Journey to Wealth
Media Chinese International - Special dividend approved!
- It was announced on Bursa Malaysia last Friday that resolutions relating to the proposed capital reduction exercise via a special dividend payout of RM0.41/share (equivalent to USD0.13 or HKD1.01) has been approved.
- The special dividend will be paid to the respective shareholders on 28 November 2012. To recap, this exercise will be funded by a combination of internal funds of RM200mil (equivalent to US$63mil) and new bank borrowings of RM500mil (equivalent to US$157mil).
- The company now has a more optimised capital structure with a forecasted gearing level of 28%. The new bank borrowings of RM500mil will turn MCIL into a net debt position of RM439mil as at end-FY13F, with an interest cover of 11x. We project earnings to fall by 9% to account for the new interest expense arising from the new bank borrowings of RM500mil. As at 1QFY13, net cash stood at a healthy RM421mil.
- The share price has rallied by a whopping 21% since July, whereby the RM0.41/share special dividend has already been priced in by the market. This does not imply a re-rating on the stock given the recent run-up in share price.
- Inclusive of the special dividend, ROE is estimated to be at 15%. The stock now trades at a PE of 15x on FY13F earnings, where dividend yield stands at 30%. Stripping off the special dividend, we assume a DPS of 6.8 sen, translating into an implied dividend yield of 4.2%, based on a 63% dividend payout.
- No change to our earnings assumption at this juncture. We maintain our BUY recommendation on Media Chinese International (MCIL), with an unchanged fair value of RM1.70/share (under-review), based on a 10% discount to our DCF value, pending the release of the 2QFY12 results, which is expected to be released on 29 November 2012.
- On a side note, the proposed listing of the group's travel and travel-related business on the Hong Kong Stock Exchange ' targeted to be completed by end-FY12 ' is likely to have an insignificant impact on its operations as the travel business only accounts for circa 3% of EBIT as at FY12.
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
2
3
BFM Podcast
4
5
BFM Podcast
6
Koon Yew Yin's Blog
CPO price is rising rapidly as shown by chart below - Koon Yew Yin
7
Axcapital's investment blog
KAB - Executing its way to a record quarter. Could more Petronas contracts be coming?
8
Mercury Securities Research
#
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....
