FBMKLCI
1861.58 +3.54pts (+0.19%)
Volume 3.947b Value 2.583b
1) The KLCI continued its winning streak for a 4th day
inline with the stronger US market as investors looked beyond the July retail
sales data which came in flat yesterday; missing estimates marginally. In the
regional market, bourses were mixed as the NIKKEI gained +0.66% helped by tech
names following the stronger NASDAQ overnight, HSI -0.36% & SHCOMP -0.74%
saw choppy trading today as concerns of the government scaling down its
stimulus plans continue to cap the market. In the local scene, TECHNOLOGY index
+1.04% gained the most grounds parallel with the strength in global tech stocks
today boosted by selected names such as GTRONIC +4.06%, UNISEM +2.85%, VITROX
+1.92%. Market breadth was neutral as losers beat gainers by a nose at 423 :
431. Futures closed at 1858 (3pt
discount).
2) Heavyweights : PETGAS +1.97% RM22.70, PBBANK +0.52%
RM19.12, MAYBANK +0.60% RM10.00, TENAGA +0.65% RM12.30, PETDAG +2.71% RM20.46,
MAXIS +0.92% RM6.52, GENM -1.37% RM4.31, GENTING -0.70% RM9.93.
3) DBT : RPB 9.951mil @ RM0.41 (1.15% PUC), APFT 7mil @
RM0.15 (2.22% PUC @ 19% discount), WZSATU 5mil @ RM1.84 (18.3% discount).
4) Situational:-
HIBISCUS -0.64% RM1.53 - Lime Norway has secured three
wells for prospective drilling in 2015 thus far, namely, PL591 and PL591B, PL
708 and PL 616. Meanwhile, decisions to drill wells or relinquish licences are
expected to be made for PL 498 and PL498B in Q4 2014, while a similar
determination is expected for PL503, PL503B and PL503C in Q1 2015. For Lime
Norway’s remaining portfolio licences, drill or drop decisions are expected in
2016 and beyond.
5) Media Prima
6 months Revenue -11% RM742.7m Net Profit -28% RM62.8m EPS 6.69 sen; Declared 1st interim single tier dividend
of 3.0 sen (2013: 3.0 sen)
Results 43% below consensus (f) RM221.6m
The market environment has been very challenging for the
media industry as a whole. In light of the circumstances, the Group recorded a
fall in revenue and profit after tax against previous corresponding period by
11% and 28% respectively. The higher revenue in corresponding period was
attributed by the contribution from Non Traditional Advertisers (General
Elections campaign expenditure). The Group’s profit after tax margin of 9%
showed continuous effort to review and improve the business processes to
further enhance efficiency and productivity.
The performance of the respective platforms for the
period ended 30 June 2014 as compared to previous financial period is analysed
as follows:
a) Television Network – Revenue for the period was lower
by 8%. Profit after tax has also declined by 24%, in tandem with lower revenue
recorded during the period.
b) Print Media – Print revenue declined by 16% due to
lower advertising and newspaper sales revenue. Profit after tax lower by 40%
against comparative period.
c) Outdoor Media – Revenue contracted by 11% against
previous comparative period due to the slow take up by advertisers.
Accordingly, it translated to 17% reduction in profit after tax.
d) Radio Network – Higher sponsorship by the advertisers
resulted in a higher revenue by 6% but flat profit after tax against
corresponding period.
e) Digital Media – Advertising revenue has increased by
9% due to the higher take up of online advertising. However, loss after tax was
comparable to prior period due to higher bandwidth costs as a result of more
page and video views.
f) Content Creation – Lower revenue by 13% due to lower
number of movie releases in the current period compared to the previous
corresponding period. Due to lower production costs, the platform was able to
record a profit after tax of RM1.9 million against a loss after tax of RM1.6
million in previous period.
Prospect for 2014
The Group is focusing on providing the best local and
international content while aiming at new market penetration and new revenue
stream. Due to the challenging business and market conditions, the Group will
continue to focus on the execution of key strategy on advertising growth
supported by major events such as Asian games, Commonwealth games and Visit
Malaysia Year 2014. At the same time, the Group will continue to manage and
improve its costs by monitoring key cost drivers, coupled with cost saving
initiatives.
Despite poor 1st Half results, maintain Hold for now as
Q2's performance showed marked improvement, increasing 28% q-o-q, and
seasonally the Group perform better in the 2nd Half due to increased
advertising & promotion for the various festivities. Media Prima also
consistently distributes favourable dividends with yield exceeding 6%.
6) Market: The KLCI index stocks are expected to
consolidate while trading focus remains with the situational lower liners.
