What's on the table
Media sector update – Jul 09 adex: Hold the applause
TV adex should stay resilient for the rest of the year. The Malay newspaper segment is likely to continue outperforming other languages. Although this trend is encouraging, there is a question mark over 4Q industry adex after an expected uptick in 3Q due to the double festivities. Taking our cue from the change in our 2009 GDP growth forecast, we reduce our forecast of 2009 adex contraction from 6.6% to 6.2%. Our 7% adex growth forecast for 2010 looks achievable, underpinned by the FIFA World Cup and Commonwealth Games. Although the leading indicators are pointing north, the absence of strong earnings visibility should cap share prices until year-end. We remain NEUTRAL on the sector. In view of the outperformance of the Malay newspaper adex which we believe is sustainable, we raise NSTP's FY10-11 forecasts by 41-50%, and DPS forecasts from 5-6 sen to 8 sen. We upgrade NSTP from Underperform to NEUTRAL with a higher target price of RM1.90 (RM1.34 previously), pegged to an unchanged 15x CY10 P/E. Continued weak data points for the English and Chinese newspaper segments should sustain the shift of ad dollars to Malay papers. Demographics, i.e. a growing base of Malay readers, bode well for NSTP.
Quick takes – Genting Bhd update – Call waiting
Results – Berjaya Sports Toto 1QFY10 in line – Lucky boost
News of the Day
– Genting’s Singapore unit announces S$1.63bn rights issue
– CIMB to finalise leaseback transactions
– CPO price drop on talk of weaker exports
– DRB-Hicom seeks partners for Saudi project
– Dayang buys two fifths of Brocos for RM132m
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