Journey to Wealth
Media Prima - Recovery in 4Q, potential dividend upside BUY
- We re-affirm our BUY recommendation on Media Prima (MPrima), with an unchanged fair value of RM2.90/share, based on our DCF value, following the release of its FY12 result.
- MPrima's FY12 core net profit of RM209mil came in within our, and consensus, estimates.
- Inclusive of the proposed 7sen/share dividend, total dividends to-date amounted to 13 sen/share. This translates into 6.1% yields, representing a 67% payout ratio.
- FY12's bottom line grew by 2% in tandem with a topline growth of 5%. EBITDA margin remained flat. Sequentially, core net profit recovered and jumped by 23% driven by the festive season, school re-opening sales and adex by non traditional advertisers. The increased advertising spend in the 4Q came as no surprise as advertisers normally utilise their budgets towards the yearend.
- Nonetheless, with advertisers; continued cautious sentiment over the election uncertainty and "wait-and-see" approach this quarter, management is expecting a stronger 2H adex instead, post-election. The group targets to achieve an adex growth of 5%-7%.
- Post result adjustments, our estimates suggest earnings to expand by 5%-6% in FY13F-FY15F. We are introducing our FY15F earnings at RM246mil.
- As part of its medium- to long-term strategy, the group is focused on building content, which is part of the non-adex revenue stream. This enables monetisation of content, given the high content cost. Approximately 60% of the local content within the FTA channels are produced in-house.
- More importantly, the dividend policy is currently up for revision - revised every 3 years - which will only affect the lower band of the dividend policy. The revision is envisaged to materialise in the 3Q-4Q. The current dividend policy stands at 25%-75%. We have upped our payout ratio to 67% for FY13F-FY15F - at parity to FY12.
- The potential for a dividend upside translates into decent yields of 6%-7% for FY13F-FY15F. This is comparable to Star Publications (Star Mk Equity, BUY) and Media Chinese International (MCIL Mk Equity, BUY) of 7% and 6% yields, respectively. This is further bolstered by a cash cushion of RM647mil as at end-FY12 and an after-tax free cash flow yield of 11%.
- Over the past year, the stock have retraced by 14% and underperformed the KLCI by 21%. The current share price is 41% below its 2-year high of RM3.00/share.
- At the current level, the stock is trading at an implied PE of 11x of FY13F, at the trough level of its historical PE.
Source: AmeSecurities
Related Stocks
| Chart | Stock Name | Last | Change | Volume |
|---|
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
THE INVESTMENT APPROACH OF CALVIN TAN
3
4
save malaysia!
6
Koon Yew Yin's Blog
7
8
CEO Morning Brief
#
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....
