Hot Stock Media Prima falls near 5-month low after poor 2Q results

by **Cals** Sat 16 Aug 2014, 00:35

Hot Stock Media Prima falls near 5-month low after poor 2Q results

Business & Markets 2014

Written by Jeffrey Tan of theedgemalaysia.com

Friday, 15 August 2014 13:13

KUALA LUMPUR (Aug 15): Media Prima Bhd fell as much as 3%, near the five-month low of RM2.30, after it reported disappointing second quarter results for the year ended June 30.

Yesterday, the media group said its net profit plunged 40.4% year-on-year to RM35.8 million from RM60.1 million, while revenue dropped 16.7% to RM388.6 million from RM466.3 million.

At 12.30 pm today, Media Prima lost 5 sen to RM2.34. The stock, among the top losers, saw trades of 1.3 million shares. It earlier hit a low of RM2.32.

In a note, CIMB Investment Bank Research said it was “disappointed” that the group’s 1HFY14 core net profit came in below 30% of house estimate and 29% of consensus.

The research house said this was due to weak industry advertising expenditure (adex) and lower circulation revenue.

Consequently, CIMB IB’s research analyst Mohd Shanaz Noor Azam downgraded to a “hold” call for the stock at RM2.40 and lowered target price (TP) to RM2.52 from RM3.05.

Mohd Shanaz also cut his FY14, FY15 and FY16 earnings per share forecasts by 8% to 9%.

“Despite the second half having been stronger in the past, we think the poor consumer sentiment from the GST implementation and subsidy rationalisation could negatively impact advertisers’ spending,” he said.

Meanwhile, Kenanga Research also lowered its TP to RM2.53 from RM2.75. Net profit forecasts for FY14 and FY15 were lowered by 12% and 7% respectively.

But the research house maintained a “market perform” call for the stock.

Analyst Desmond Chong of Kenanga said: “While the on-going Visit Malaysia Year events could continue to lend strength to the adex sentiment, we are keeping our conservative view unchanged.”

“This is in light of the subsidy rationalisation plans as well as the recent tragedies which could dampen the adex sentiment.”