MPR  continues  to  chart  positive  growth  for  its  3Q13  results  –  in  line with our expectations. We are expecting a stronger boost in 4Q13 and the  group  should  be  able  to  meet  our  full-year  FY13  forecast.  It  also announced  a  3  sen  interim  dividend  for  3Q13.  MPR  is  moving  on  the right track and this  counter continues to be our Top Pick  for the media sector. Maintain BUY with the MYR3.60 FV unchanged.

• Results  in  line.  MPR’s  3Q13  net  profit  of  MYR63.5m  (+5.7%  q-o-q;+8.4%  y-o-y)  is  in  line  with  our  expectations,  but  slightly  below consensus.  The  group’s  9M13  results  make  up  66.1%  of  our  full-year forecast  and  we  believe  MPR  is  able  to  meet  our  FY13  earnings estimates.
• Earnings  growth  maintained.  We  think  it  is  encouraging  to  see  the majority of MPR’s  business divisions recording  positive earnings growth, despite a lack of  major advertising expenditure (adex)-friendly events. In 9M13, its advertisement revenue was up by 5% y-o-y,  with contributions from: i)  non-traditional  advertisers (NTA),  ii)  new market segments,  and iii) new products. Its 9M13 non-advertising revenue also grew by 2% y-oy,  showing  that  the  content  production  division  is  expanding  well.  Its EBITDA  also  grew  by  6%  on  better  cost  management.  Hence,  MPR reported a strong set of results in 3QFY13.
• Risks.  The  emergence of Pay-TV  channels  will  dilute the viewership of its  Free-To-Air  TV  (FTA  TV)  offerings,  while  fluctuations  in  newsprint costs  may  narrow  its  print  media  businesses’  performance.  MPR  may also  miss  our  earnings  forecast  should  adex  growth  estimates  prove weaker than expected in 4Q, which  historically is the strongest quarter for adex.
• Maintain  BUY,  FV  MYR3.60.  We  continue  to  like  MPR  for  its  solid business model, clear expansion direction, and prudent financial and risk management. Hence, we maintain our BUY call and MYR3.60 FV, which is  based  on  15x  FY14F  P/E.  MPR  is  also  our  Top  Pick  in  our  media sector  coverage  universe  and  has  become  even  more  attractive  now after the recent sell down on the counter.

Financial Exhibits

SWOT Analysis

• MPR’s well-diversified business model allows the company to have various income streams

Company Profile
Media Prima is the only integrated media player in Malaysia with exposure across all media platforms.

Recommendation Chart

Source: RHB