Top Story : MCIL – Expecting stronger adex ahead - Outperform
Briefing Note
- Management expects stronger ad revenue ahead with bookings visibility having improved to around two months as opposed to only a month a year ago. We believe ad spending in the months ahead should see further improvement, in tandem with a recovering economy and sporting events ahead.
- Currently, the Hong Kong and Malaysian operations are carrying around 3 and 8 months worth of newsprint stock respectively at an average cost of US$550-580. This lower cost should bode well for the group ahead but a dampener is that the current newsprint price is around US$700/tonne. MCIL’s strategy would be to wait for the newsprint price to drop in order to stock-up more.
- MCIL has also been expanding its presence in the digital media platform by entering into mobile reading market in China through ByRead and introducing an entertainment website called Hihoku in Nov 2009. Total capex spent on expanding its digital media platform was said to be minimal (approximately HK$2m) and management expects to spent another HK$2m p.a. moving forward.
- Our fair value is maintained at RM1.14, based on unchanged target CY10 PER of 13x.
RHB Equity 360° (MCIL, Consumer, Allianz, TNB, PLUS, Dialog, Fajarbaru, Axiata, TM, Gent,Sime, CBIP, Ta Ann...
No comments:
Post a Comment