Beat our estimates. MPR's FY12 net profit of RM209.3m beat our and street's estimates. On a quarterly basis, the group's revenue climbed 11% on the back of an increase in adex in  the  final  quarter  of  the  year,  fuelled  by  festive  season  and  school  reopening  sales,  as well as adex by the Non Traditional Advertisers (NTAs). Other takeaways were:

Market  remains  challenging.  After  recording  a  lackluster  adex  growth  2%  in  2012,  we think the adex growth outlook for 2013 may not be too encouraging due to uncertainties in the global economic recovery and the local political conditions, which may lead to cautious spending by advertisers. We believe any positive progression in adex may only come in by 2H2013,  when  conditions  on  the  global  and  domestic  fronts  become  more  stable  and advertisers may be more willing to spend on their budgets.

Maintain NEUTRAL with RM2.20 FV. Despite a challenging operating environment, MPR has  managed  to  capture  the  Malay-language  media  market,  in  which  we  believe  there  is still room to grow. Also, MPR's improved financial position has proven that the company is moving on the right track. Therefore, we are revising our FY13f/FY14f earnings upwards by 14.0% and 26.2%  respectively,  as  we  may  have  been  too conservative  earlier.  However, we  prefer  to  remain  prudent  and  stay  cautious  on  the  development  of  the  industry.  Thus we  are  maintaining  our  NEUTRAL  call  on  MPR,  with  our  new  RM2.20  FV  based  on  11x FY13f PER (from 13x previously) to reflect our concerns on the macro outlook. 

Source: OSK