From  a  recent  meeting  with  MPR’s  management,  we  learnt  that  the group has a clear-cut expansion strategy that will propel its growth. We continue to believe that overall adex will improve further in 2H2013 and MPR,  as  a  major  beneficiary  of  this  trend,  remains  as  our  Top  Pick  for the media sector. We are raising our FV to MYR3.60 as we roll over our valuation to FY14F. Maintain BUY. 

- Decent  improvement  in  1QFY13.  Media  Prima  (MPR)  reported  a 30.3% y-o-y improvement in its 1QFY13 net profits last week. As 1Q is seasonally  its  weakest  quarter,  we  see  further  growth  in  store  for  the company. We opine  that  adex  could  possibly  go  up again  in  2H  due  to pent-up  adex  as  advertisers  held  back  spending  due  to  the  general election. MPR is key beneficiary of the 2H adex recovery.  

-  Key highlights from recent meeting. We met with MPR’s management recently and learnt that the company has set a clear goal and strategy to propel its growth. Some of our key takeaways are:  

a)  It  is  actively  seeking  to  develop  non-traditional  advertising clients,  such  as  the  federal  government  or  state governments, to improve its topline. 
b)  It  aims  to  continue  to  secure  advertisement  contracts  from large corporation to strengthen revenue growth. 
c)  To  lure  advertisers,  it  will  invest  more  on  quality  content, including  self-created  material.  The  content  could  also  be sold to third parties to boost earnings. 
d)  It will continue to target young urban adults – 8TV and One FM are the successful examples of such endeavours. 
e)  It is ready to roll out digital transmission sometime in 2014. 
f)  Management believes more significant growth may only be seen in FY14. 

Source: RHB