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Market Dateline PP 7767/09/2010(025354)

RHB Research Institute

RHB Equity 360°


28 April 2010 (Media Prima, Carlsberg; Technical: KNM)

Top Story : Media Prima – Strong start for TV and print adex Outperform
Company Update
- According to Nielsen Media Research (NMR), 1Q10 adex for Media Prima’s TV channels jumped 34.6%
yoy while the print media saw gross adex grow by 7.5% yoy. For the TV segment, 1Q adex growth was led
by TV9 (+62% yoy) while for the print media, the growth mainly came from Harian Metro (18% yoy).
Generally the stronger TV adex growth is consistent with past trends, where we note that TV adex has
historically had a higher leverage to GDP growth, vis-à-vis print adex.
- For FY09, average discounts for the TV segment was 68.8% (FY08: 61.6%) as the weaker economic
conditions meant that higher discounts were required to secure commitments from advertisers. For FY10,
management expects discounts for TV segment to average around the 65%-level as economic conditions
improve. The bulk of the increase in revenue from lower discounts should flow down to Media Prima’s
bottomline.
- NSTP’s print adex market share grew to 31.5% in 1Q10 from 29.2% in 1Q09. This was largely due to the
growth in adex from the malay dailies, partly offset by NST’s market share loss. Management, however,
remains positive on the adex outlook for NST given improving economic conditions and major sporting
events in FY10.
- We have revised up our FY10 and FY11 ad revenue growth projections for the TV segment to +8% and
+5% respectively and for print segment, to +4.9% and 4.6% respectively. Overall, our FY10-11 net profit
forecasts have been raised by 9.9%-13.5%.
- Our indicative fair value has been revised upwards to RM2.55 (fully diluted) from RM2.23 based on
unchanged target FY10 PER of 15x. We reiterate our Outperform call on the stock.

Corporate Highlights

Carlsberg Brewery : Raising prices Outperform


News Update
- Malaysia’s two brewers will raise prices of their beer and stout products by about 3.6% in May to offset
higher raw material costs, particularly malt.
- We estimate that this price increase will raise Carlsberg’s net profit by 2-2.8% for FY10-12, assuming there
is no price increase for Carlsberg’s Singapore operations. We do not expect this minimal price increase to
have any significant impact on TIV, given that we already expect TIV to be relatively muted, at 1% growth
in FY10 and 0% in FY11-12 in Malaysia.
- We adjust our earnings forecasts for Carlsberg upwards by 2% for FY10, and by 2.5-2.8% for FY11-12,
given the seven month effect in FY10.
- Our DCF-based fair value of RM5.90 (based on unchanged WACC of 9.2%) remains unchanged.

Technical Highlights

Daily Trading Strategy : Sentiment is deteriorating…


- Though the FBM KLCI ended above the key supportive 10-day SMA near 1,336 on late buying support, the
candlestick pattern has shown a failure to extend Monday’s recovery momentum.
- This suggests follow-through selling momentum likely today.
- Moreover, the improvement on the daily turnover was swiftly offset by the further deterioration of the market
breadth. Most of the turnover was contributed by the strong selling activities on the lower liners, in our view.
- This has once again, prompted doubts over the strength and sustainability of any recovery leg ahead.
- Added with more than 2% plunge in overnight US and European markets amid S&P’s rating cut for Greece
and Portugal, we expect the FBM KLCI to open weak and might even lose the key 10-day SMA upon
opening.
- Unless the FBM KLCI can clear off the recent high of 1,347.61 on strong turnover of 1.0-1.2bn shares, any
rebound attempts are doomed to be weak and unsustainable.
- On the downside, losing the 10-day SMA will spark fresh selling waves, which could potentially press the
index towards the 40-day SMA near 1,322 and to revisit the 1,300 psychological level on exaggeration of
selling momentum.

Daily Technical Watch: KNM Group – Stay away, pending share price stabilisation…
- 10-day SMA: RM0.619
- 40-day SMA: RM0.725
- Support: IS = RM0.50 S1 = RM0.385
- Resistance: IR = RM0.69 R1 = RM0.85 R2 = RM1.00

Bulletin Board

Co/Sector News Impact Recom


TM TM’s CEO said that although it was still too early TM, we think, is unlikely to become a full-fledge MP, FV =
to talk about quad-play services, they are open to mobile operator at this juncture given the costs RM3.55
opportunities. (StarBiz) involved in rolling out a network and/or M&A
deals (e.g. acquiring an existing operator),
especially given that TM is still rolling out its
HSBB network. However, we would not discount
the possibility of a MVNO-type model for TM as it
can then offer mobile services without having to
deploy its own network infrastructure.
Media Prima Media Prima has submitted a proposal to the This is not a surprise as Media Prima had OP, FV =
BOD of NSTP to undertake a delisting exercise previously mentioned that the company would RM2.55
as it does not comply with the free float not be maintaining NSTP’s listing status if NSTP
requirement. (Bursa) did not meet the free float requirement after the
privatisation offer. NSTP minorities will be offered
an exit offer of 1.2 Media Prima shares and 0.2
Media Prima warrants for every 1 NSTP share
held, similar to the privatisation offer. This
exercise is expected to be completed by end
Jun-early Jul.
Suncity Buys Sunway Parking Management S/B for The purchase price of RM12.6m translates into Maintain
RM12.6m from Sunway Pyramid S/B (52%- 6.6x FY08 PER and 2.7x P/NTA, which we OP, FV =
owned subsidiary). (Bursa) consider to be fair. Most importantly, the RM5.33
acquisition will give Suncity access to a piece of
vacant land next to Sunway Pyramid Shopping
Mall. The land will be developed into a 28-mixed
use commercial building with office and retail
elements as well as 1,027 car parks. No change
to our earnings forecasts for now as the
additional income for car parking business is
insignificant.
Notion Vtec Notion Vtec has announced a proposal to acquire Positive. This would improve its efficiency in OP, FV =
the remaining 60% of stake in Autic Mekki Sdn manufacturing various components which require RM4.59
Bhd for a total purchase consideration of nickel plating of its metal components i.e. camera
RM3.4m. (Bursa) barrels and electronic braking system. The
associate contributed around RM0.4m in the
1QFY10, which implies that the proposal
including the impact to the balance sheet would
add around RM0.55m net profit per quarter, or
around +1-2% to our full-year forecast.

Important Dates
Company Entitlement details Ex-date Payment date
New entitlements
Titan Chemicals Final tax exempt dividend of 4.5 sen 10-May-10 25-May-20
Atrium REIT First interim income distribution of 2.1 sen 10-May-10 27-May-10
Deleum Final single tier tax exempt dividend of 7 sen 12-May-10 27-May-10
Warisan TC Holdings Final dividend of 6 sen less income tax 25-May-10 17-Jun-10
Hock Seng Lee Final dividend of 1 sen + special dividend of 0.4 sen, less 25% tax 1-Jun-10 15-Jun-10
Eng Teknologi Final tax exempt dividend of 6 sen 9-Jun-10 28-Jun-10
Keck Seng (M) Final dividend of 6% tax exempt 21-Jun-10 12-Jul-10
Perak Corp First and final dividend of 2.5 sen less 25% tax 28-Jun-10 15-Jul-10
TSH Resources First and final single tier dividend of 5 sen 28-Jun-10 22-Jul-10
Eonmetall Group Final tax exempt dividend of 1.25 sen 8-Jul-10 30-Jul-10

Going “ex” on 29 Apr


Genetec Technology Bonus issue on the basis of 1-for-1 29-Apr-10 -
Selangor Properties First and final dividend of 10 sen less 25% tax 29-Apr-10 21-May-10
Asia File Corporation Interim dividend of 12 sen less tax 29-Apr-10 27-May-10

...For more details, see individual reports attached

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Stock Ratings

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Industry/Sector Ratings

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