FY21’s LATAMI of RM5.4m came in better than our/consensus full-year LATAMI expectations. Revenue fell by 52% due to 28% and 99.8% drop in the publishing and printing and travel segments, respectively. With international travel restrictions easing up in some countries, we believe this will act as a catalyst to earnings moving forward. We maintain MARKET PERFORM with a TP of RM0.190.

FY21 is deemed above expectations As FY21 LATAMI of RM5.4m is 28%/81% less than our/consensus full-year LATAMI expectation of RM7.5m and RM28.4m, respectively. The group declared an interim dividend of 0.42 sen (or 0.10 USD cents) which we deem to be a surprise as we expected it to remain off-the-table to preserve cash.

YoY, FY21 revenue fell by 52% from RM992m in FY20 to RM480m as revenue diminished across all segments. The major drag in revenue came from the group’s travel segment as its contribution to the group’s revenue plunged from 33% in FY20 to 0.11% in FY21 as international travel restrictions virtually halted travelling activity. Interestingly, 4QFY21 revenue dropped by 23% from 4QFY20. However, PBT turned around by 269%, thanks to cost savings and fair value gains from the revaluation of the group’s investment properties in Malaysia. All in, the group registered a LATAMI of RM5.4m (-119%).

QoQ, revenue dropped by 3% due to a 6% decline in its publishing and printing and the re-imposition of MCO in 1QCY21. Despite the fall in revenue, the group successfully recorded a PBT of RM10.8m, up by 94% due to reasons mentioned above. With that said, the group posted a PATAMI of RM9.2m (+64%) compared to RM5.6 in 3QFY21.

Outlook. With advertisers shifting their preference to digital platforms as a means to reach customers more effectively, the group will continue to seek ways to grow their digital advertisement solutions to better cater to clients. Notably, the group organised a virtual expo and webinar last year whereas its Hong Kong segment launched an e- commerce platform, Power Up Store, in 2020. Moreover, with countries gradually easing their international travel restrictions as the vaccination programs are being rolled out worldwide, we believe the group’s travel segment will gradually recover from 2HCY21 onwards.

Post results, we increase FY22E earnings by 5% and introduce our FY23E earnings where we anticipate core PATAMI to increase by 44%.

Maintain MARKET PERFORM with a TP of RM0.190 based on FY22E P/NTA of 0.48x (in-line with its 3-year mean). We believe its travel segment is set to recover from 2HCY21 onwards as countries worldwide are gradually relaxing their international border restrictions (e.g. European Union is looking to welcome visitors from countries with low COVID-19 cases and those whom have been fully vaccinated as early as May 2021 USA and Canada are in talks to reopen the land border for non-essential travel by June 2021 whereas New Zealand had opened their borders with Australia beginning 19 April 2021). In addition, should the need to capitalize on attractive investment opportunities arise, the group is backed by a solid cash pile which stands at 15.3 sen per share.

Key risks to our call include: (i) higher/lower-than-expected adex revenue, (ii) higher/lower-than-expected travel services business, and (iii) higher/lower-than-expected operating expenses.

Source: Kenanga Research - 28 May 2021