AmResearch : 'Buy' calls for Media Prima, Media Chinese, Star on improving adex

AmResearch : 'Buy' calls for Media Prima, Media Chinese, Star on improving adex
Business & Markets 2013
Written by Jason Tan of theedgemalaysia.com
Wednesday, 17 July 2013 13:41

KUALA LUMPUR (July 17): AmResearch Sdn Bhd has recommended "buy" calls for MEDIA PRIMA BHD [] MEDIA CHINESE INTERNATIONAL LT []d and Star Publications Malaysia Bhd to cash in on advertising expenditure (adex) growth.

In a note today, AmResearch said it sees a gradual uplift in consumer and advertiser sentiment. The research firm is projecting the media sector to grow 8.7% this year and 11.2% in 2014.

The estimates were adjusted upward from its earlier forecasts of 8.3% and 8.9% respectively.

AmResearch expects adex to pick up sequentially from the second half of this year with the conclusion of Malaysia's general election
and on the seasonal effect of which advertisers tend to exhaust their budget towards year end.

“We continue to like Media Prima for its integrated operations across various platforms and the adex growth that is skewed towards the TV segment,” AmResearch said.

The research house's recommendation for Media Chinese is due to the latter's decent dividend yield of 5% and dominant market share of over 85% in the Chinese-language newspaper segment.

AmResearch said this allows Media Chinese to benefit from a strong readership and decent adex growth in vernacular newspapers.

Meanwhile, Star Publications also remains attractive for its high dividend yield of over 6%, according to AmResearch.

The research firm has target prices of RM3.17 for Media Prima and RM1.45 for Media Chinese. AmResearch said Star Publications is fairly valued at RM3.10.

Meanwhile, AmResearch said it is maintaining its “hold” call for Astro Malaysia Holdings Bhd.

It, however, raises Astro’s fair value to RM3.08 from RM2.89 as the research firm lifts the pay-TV operator’s earnings estimates to account for a higher earnings before interest, taxes, depreciation, and amortisation margin.

This is due to Astro's many products in the pipeline and strong in-house production capability, according to AmResearch.

“However, Astro will be laden by its heavy capital expenditure cycle that will peak in FY15. Assuming a 75% payout, Astro only pays a dividend yield of 2% -- far from the 5% to 6% range of other media players,” AmResearch said.

any recommendations for call warrants from u guys? 

4502 MEDIA

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6084 STAR

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thanx   Cals