By Alexander Winifred
KUALA LUMPUR (Nov 21) — CIMB Investment Bank cuts Star Media Group target price to MYR1.33 from MYR1.73; keeps Hold call. Notes, 9M17 core earnings fell 73% on-year due to lower advertisement expenditure, or adex in print and digital segment amid poor consumer sentiment and shift toward digital media. 3Q17 revenue dropped 14.8%, a “negative surprise” as Southeast Asian Games event “usually” drives adex spending to capitalize on positive sentiment. “We believe the traditional adex market is likely to remain in a slump going forward,” despite Malaysia’s strong economic growth year-to-date, house says. Cuts FY17-FY19 earnings-per-share by 37%-43% to impute lower print adex spending; projects print adex to drop 25% in FY17. Also shifts valuation method to price-to-book from sum-of-parts due to earnings volatility. Investors should switch to Astro Malaysia Holdings “for relatively defensive earnings and less exposure to volatile adex,” house says. Star Media shares rose 1.5% to MYR1.37 Monday.
– By Alexander Winifred; Alexander.Winifred@nikkeinewsrise.com; +60320267363
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