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The revised expected utilization of gross proceeds raised from the proposed Financial Indicators
rights shares with warrants is as shown in Exhibit 1: FY13 FY14
Net Debt / Equity (%) net cash net cash
ROE (%) 15.5% 16.1%
Exhibit 1: Proposed utilization of gross proceeds
ROA (%) 12.4% 13.2%
Minimum Scenario Maximum Scenario NTA/Share (RM) 0.12 0.14
(RMmn) (RMmn) Price/NTA (x) 1.4 1.2
Capital expenditure - 60.0 Share Performance (%)
Repayment of bank borrowings 5.0 5.0 Price Change AMGB FBM KLCI
1 mth 3.2 0.5
Working capital 11.0 17.2
3 mth (5.9) 0.4
Estimated expenses for the proposal 0.6 0.6 6 mth (8.6) 10.1
TOTAL 16.6 82.8 12 mth (63.0) 8.6
Source: Company, TA Research
Our View
While the successful implementation of Digital Terrestrial Television
Broadcasting (DTTB) infrastructure could allow delivery of real-time and more
lively content to audience to attract more advertisers and may command better
ad rates, we are concerned over the prolonged postponement in the rollout of
Source: Bloomberg
the DTTB in Klang Valley, which has been delayed for more than 2 years to
2H13. Furthermore, additional funding for capex may be needed before the
DTTB could be successfully rolled out.
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TA Securities
A Member of the TA Group 14-Aug-13
Besides funding, issues such as finalization of agreements with clients on ad
rates, outstanding renewal of licensing agreement with RapidKL (expired on 27
April 2013) for the right and access to Asia Media to install, operate and
maintain the audio visual advertising medium in RapidKL buses, and acquiring
suitable spots for installation of gap fillers have to be addressed before the
commencement of DTTB.
Impact
We trim our earnings forecast by 1.9%, 1.4% and 1.4% for FY13, FY14 and FY15
respectively to reflect the slight decrease in interest savings from the rights
issues proceeds due to lower issue price for rights shares, as compared to the
indicative issue price of RM0.13 each which we used in our assumption earlier.
Valuation
Based on 5x FY14 PE valuation, we arrive at an unchanged target price of
RM0.105/share.
Earnings Summary
FYE: 31 Dec (RMm) 2011 2012 2013F 2014F 2015F
Revenue 36.5 44.8 47.8 54.1 59.6
EBITDA 17.7 25.8 21.5 27.8 30.0
EBITDA margin (%) 48.3 57.6 45.0 51.3 50.3
Pretax profit 15.0 15.9 15.7 21.0 22.1
Net profit 15.0 11.8 15.3 20.6 21.8
Core net profit 15.0 11.8 15.3 20.6 21.8
EPS (sen) 3.0 2.3 1.5 2.1 2.2
Core EPS (sen) 3.0 2.3 1.5 2.1 2.2
Core EPS growth (%) 46.0 (23.6) (33.2) 34.5 5.6
PER (x) 4.5 5.9 8.8 6.6 6.2
Net DPS (sen) 0.0 0.0 0.0 0.0 0.0
Net div yield (%) 0.0 0.0 0.0 0.0 0.0
ROE (%) 36.2 16.9 15.5 16.1 14.6
Disclaimer
The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ or completeness is not guaranteed and opinions are
subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any
direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies
mentioned herein.
This report has been prepared by TA SECURITIES HOLDINGS BERHAD for purposes of CMDF-Bursa Research Scheme ("CBRS") administered by Bursa Malaysia Berhad and
will be compensated to undertake the scheme. TA SECURITIES HOLDINGS BERHAD has produced this report independent of any influence from the CBRS or the subject
company.
For more information about CBRS and other research reports, please visit Bursa Malaysia’s website at:
http://www.bursamalaysia.com/market/listed-companies/research-repository/research-reports
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