Kimlun Corp : Bags RM263mil JB City Council complex job

STOCK FOCUS OF THE DAY

Media Prima : Unlocking synergies by securing top spot in digital               BUY

We reiterate our BUY call on Media Prima (MPR) with an unchanged fair value of RM1.45/share based on DCF at a 10% discount rate. MPR has entered into a sale and purchase agreement with Rev Asia and Youth Asia to acquire the entire equity interest in Rev Asia Holdings (RAH) for a total consideration of RM105mil. RAH is a media company specialising in digital advertising solutions and content creation. Notable brand names under its umbrella include OHBULAN!, SAYS, Viral Cham, Rojaklah, 8share, MyResipi and SirapLimau. RAH currently has a combined 4.6mil monthly visitors while MPR has 5.8mil. This means that the acquisition could expand MPR’s digital audience reach to as high as 10.4mil, bringing the company to the top spot in digital reach locally after Google and Facebook. This allows MPR to unlock synergies by offering its existing products to the enlarged audience base, such as home shopping through CJ WOWSHOP.

Currently, MPR is in a net cash position of RM75mil. Pursuant to the purchase, MPR will record a net debt of RM30mil and a net gearing ratio of 0.02x, which is healthy. Management has said that the purchase will not affect its ability to sustain dividend payments. Moving forward, MPR could unlock synergies by increasing adex rates charged by RAH. MPR’s audience reach will expand post-acquisition and the company will be able to offer one-stop solution for advertisers, i.e. from content creation to digital marketing to all other forms of advertising.  All-in, we believe that the development enhances the value of MPR in the longer term.

Other :

Kimlun Corp : Bags RM263mil JB City Council complex job                                                              BUY

Telekom Malaysia : Steady course from internal management promotion             BUY

QUICK TAKE

Star Media Group : Disposal of Cityneon could unlock cash for special dividends   BUY                                                                                                                  

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ECONOMIC HIGHLIGHTS

China :  Exports to remain healthy

The French Election : Macron’s victory priced in

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