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Company Update � Star Publ. (SELL,
maintain)
- 1H14 results within expectations, DPS up 50% yoy Star reported a firmer 1H14 revenue and core net profit of RM485.7m (+2.9% yoy) and RM66.7m (+21.6% yoy) respectively. The Star�s 1H14 core net profit, after stripping off VSS cost, was inline with expectations, accounting for 46% and 47% of our and street FY14 estimates respectively. In addition, Star announced a higher-than-expected 1H14 DPS of 9 sen (1H13; 6 sen).This is equivalent to a payout ratio of 119%, which may not be sustainable. We are keeping our SELL rating on Star primarily due to: 1) the company being adversely affected by a shift in adex trends towards the broadcast segment from the print segment; 2) negative effects on hard copy circulation as reading preferences shift to mobile or the internet; and 3) media industry could remain challenging going forward as adex could be affected in the quarters ahead due to the recent MH17 incident. Our target price for Star is maintained at RM2.20 based on an unchanged 11x EPS.
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Other Calls
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