KUALA LUMPUR: Maybank Investment Bank has upgraded Media Prima Bhd to “buy” from “sell previously on positive near-term advertising expenditure (adex).
The research house expects better sequential earnings ahead for Media Prima, led by adex-friendly events anticipated throughout financial year 2018.
“Given that General Election (GE) 14 was held on May 9, the bulk of pre-GE ads should be reflected in adex revenue for the second quarter of this year.
“Besides that, past major sporting events, similar to the upcoming FIFA World Cup (Jun 14 – Jul 15) has experienced periods of heightened advertising activity, especially in FTA TV and OOH mediums which is beneficial to Media Prima,” Maybank IB said.
The research firm added that Hari Raya Aidilfitri celebrations may promote higher consumer spending during the month of Ramadhan and improving consumer sentiment post-GE may result in progressively better adex sentiment.
Other than adex outlook, Maybank IB believes Media Prima’s value has emerged.
Since Media Prima reported poor results in the fourth quarter of last year, its share price has fallen 42 per cent with the company trading at undemanding valuations, Maybank IB said.
“Media Prima’s remaining intangible assets (i.e. rights from TV programme, outdoor concession etc) also still holds value,” it added.
Maybank IB said Media Prima is also looking to dispose several parcels of land which could record sizeable disposal gains in the near-term.