In  April,  adex  rose  by  a  decent  13.2%  y-o-y  despite  heightened uncertainties  over  the  general  election.  Ad  dollars  continued  to  shift from  print  to  TV,  while  Pay-TV’s  adex  continued  to  grow  robustly compared to FTA TV. We maintain an OVERWEIGHT rating on the sector with  Media  Prima  as  our  top  pick,  as  we  believe  adex  may  improve further in 2H2013.  

-  Growth  continues.  Although  advertising  expenditure  (adex)  growth  in April  was  flattish  at  MYR988.6m  (-0.1%  m-o-m,  +13.2%  y-o-y),  its  YTD growth was at a decent 17.9% y-o-y. On a monthly basis, Free-To-Air TV (FTA TV)’s adex continue to see softer growth at MYR233.7m (-5.1% m-o-m, +1.9% y-o-y), compared to Pay-TV’s adex of MYR331.0m (+10.0% m-o-m, +49.3% y-o-y). YTD, Pay-TV’s market share grew by 889.7bps y-o-y, a contrast to the 138.6bps decline for FTA TV. 

- Chinese newspapers still outperforming its peers. Newspapers’ YTD market share dropped by 615.2bps y-o-y,  which coincided with our view that  adex  is  shifting  from  print  to  TV.  Nonetheless,  Chinese  language newspapers’  adex  still  outperformed  its  peers,  rising  by  9.2%  y-o-y  in April. Its YTD market share also grew by 227.3bps y-o-y. If we scrutinize adex  by  individual  newspaper,  Media  Chinese  (MCIL)  continued  to dominate  the  Chinese  medium  market,  with  15.1%  y-o-y  growth. Meanwhile,  Media  Prima  (MPR)  subsidiary  New  Straits  Times  Press (NSTP)’s  adex  fell  4.1%  y-o-y  in  April,  dragged  down  by  a  19.2% 
decrease in adex from its News Straits Times publication.

- Maintain OVERWEIGHT. We maintain that adex could improve further in 2HCY13 and thus, keep to our OVERWEIGHT rating for the sector, with a Buy on our top pick, MPR (FV: MYR3.60). We also maintain a BUY on Catcha  Media  (CHM)  (FV:  MYR0.92)  and  a  TRADING  BUY  on  MCIL (FV:  MYR1.31),  as  we  believe  the  latter  may  be  able  to  meet  our expectations  and  even  exceed  forecasts  despite  being  dragged downward  by  its  Hong  Kong  operations.  Lastly,  we  downgrade  Astro (ASTRO)  (FV:  MYR3.36)  to  a  NEUTRAL,  as  its  share  price  has  been performing well and offers a <10% upside to our FV.

Source: RHB