RHB Equity 360° (Media, WCT, Parkson, MBM, QL, HL Bank, Star; Technical: Public Bank) - 25/05/2010

Top Story :
Media – Apr adex for print and tv media grew 20.8% yoy Neutral

Sector Update
Media Prima : Fair value at RM2.55 Outperform
MCIL : Fair value at RM1.09 Outperform
Star : Fair value at RM3.60 Market Perform
Astro : Privatisation set to go through Ceased Coverage

♦ According to Nielsen Media Research, Apr’s gross adex for print and TV media rose 20.8% yoy but was down slightly by 3.8% mom, led by print (+22.2% yoy; -4.7% mom) while TV reported commendable growth of 18.9% yoy (-2.5% mom). We believe this strong yoy growth was mainly due to the low base effect coupled with improving economic conditions. YTD (Jan-Apr), adex growth stood at 31.3% yoy.
♦ Apr’s yoy adex growth for the print media was once again led by the Chinese dailies (+28.6% yoy). The English dailies saw gross adex growth of 24.4% yoy, thanks largely to Star, while for the Malay segment, gross adex grew by 13.9% yoy mainly due Harian Metro and Berita Harian offset by the consecutively weaker adex for Utusan.
♦ Apr was another good month for TV, where gross adex grew by 18.9% yoy. All the FTA TV channels posted stronger yoy growth except for TV1, where adex growth dropped by 19.6% yoy.
♦ We expect adex in 2010 would continue to gain momentum as the global economy recovers. Adex growth would also be supported by “ad-friendly” events such as the 2010 FIFA World Cup, Thomas/Uber Cup and the Commonwealth Games.
♦ Media Prima (FV=RM2.55) remains our preferred pick as we believe adex (especially TV) will be a prime beneficiary of a recovering economy. We maintain our Outperform call on Media Chinese (FV=RM1.09) and Market Perform call on Star (FV=RM3.60). We are ceasing coverage on Astro given that Astro Holdings has received an acceptance level of more than 90% in its general offer to privatise Astro.
♦ Maintain Neutral stance on the sector.

RHB Equity 360°(Media, WCT, Parkson, MBM, QL, HL Bank, Star; Technical: Public Bank) - 25/05/2010