Wednesday, January 4, 2012

Media Prima dips, Affin Research has Sell, TP RM1.68

KUALA LUMPUR (Jan 4): Shares of MEDIA PRIMA BHD [] were marginally lower at RM2.54 at the midday break with trading volume on the thin side while Affin Investment Bank Research was cautious on the outlook for the group.

At 12.30pm, it was down one sen to RM2.54. There were 277,200 shares traded at prices ranging from RM2.54 to RM2.55.

The FBM KLCI was up just 1.21 points to 1,514.75. Turnover was 958.42 million shares valyed at RM782.15 million. Tthe overall broader market was slightly higher with advancing stocks lead decliners 377 to 269 while 306 counters were unchanged.

Affin Research said Media Prima was trading at a forward price-to-earnings (PE) multiple of 17 times (near its +1 standard deviation mean PE) but it was likely to come off, and could potentially test its -1SD historical mean PE level of 10.8 times, triggered by earnings disappointment ahead.

'Our FY12-13 EPS estimates are 10%-30% below street. Risk to our anti-consensus SELL rating lies on us being too early in our recommendation as the stock price could potentially be lifted by an election rally.

'Nevertheless, we believe that any stock price rally would optimally be the best time to trim positions in the stock ahead of a more challenging adex environment in 2012,' it said.

Affin research said Media Prima was highly leveraged to the broadcast segment which was highly vulnerable to an economic slowdown.

'Maintain our SELL rating on Media with an unchanged target price of RM1.68 based on 12x FY12 EPS,' it said.


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