A brand New Year and a brand NEW MESS from OSK Research?
Well, just in case you need to know, I am NOT a fan of OSK Research at all. It's well documented on this site, the reasons why I reckon they are simply way below par. (for example do read: QC And The Research Reports or past postings Featured Report OSK )
This morning, I noted this stunning snippet from Business Times: It’s OSK Research, not MCIL (do note, that BTimes link is not a permanent link! )
- It’s OSK Research, not MCIL
Published: 2012/01/04
KUALA LUMPUR: Our report published on January 3 headlined “MCIL: Payout ratio of 60pc for next two years”, should quote OSK Research and not Media Chinese International Ltd (MCIL).
MCIL has clarified that it has not at any time released any statement which forms the basis of the article.
“We have also not given any statement stating that among others, we will be incorporating a payout ratio of 60 per cent for the next two years nor have we given any opinion on the exchange rate for USD into RM,” the company said in a statement.
That article could not be found. Googled it. I got this not working link: Media Chinese Int'l: Payout ratio of 60pc for next two years
But luckily I got a copy of that article. Business Times wrote the following:
- Media Chinese Int'l: Payout ratio of 60pc for next two years
Published: 2012/01/03
KUALA LUMPUR: Media Chinese International Ltd (MCIL) sees that its dividend surprises are likely to go forward to right-size the group's balance sheet.
MCIL said it is incorporating a payout ratio of 60 per cent for the next two years, which translates into a decent yield of more than five per cent per year.
MCIL was formed by the merger of Sin Chew Media Corp Bhd, Nanyang Press Holdings Bhd and Hong Kong-based Ming Pao Enterprise Corp Ltd.
It emerged with four core daily publications in Malaysia, which are Sin Chew, Nanyang, China Press, and Guang Ming.
MCIL came off a stellar 2011 with a nine-month advertising and expenditure (adex) growth of 10.4 per cent year-on-year.
It saw a positive momentum spilling over to 2012, with adex likely to close at two times its 2012 gross domestic product growth forecast of 5.2 per cent.
"It is expected to be boosted by upcoming major adex-friendly events such as the national snap polls and Euro 2012 in the middle of the year," MCIL said in a statement last week.
Newspaper remains the largest advertising medium with more than 50 per cent share of total adex.
Newsprint makes up more than 40 per cent of MCIL's financial year 2011 operating costs.
It said that in the event of a sharp spike in newsprint prices, the negative impact would be partially mitigated by continuous weakness in the US dollar against the ringgit for which it is targeting to close the year at RM3 per US dollar compared with RM3.15 currently.
That was what Business Times wrote!
- MCIL said it is incorporating a payout ratio of 60 per cent for the next two years
- MCIL is OSK’s top pick in media sector
Posted on 1 January 2012 - 08:18pm
PETALING JAYA (Jan 1, 2012): Media Chinese International (MCIL) is OSK Research's top pick in the media sector, supported by its strong management, sturdy 2012 advertising expenditure (adex) growth and its near-monopoly of the Chinese daily space in the country.
The research house has maintained its buy call on MCIL at RM1.27, with an unchanged fair value of RM1.47 based on 13 times CY12 price/earnings ratio.
"In view of the volatile global equity markets, we believe MCIL would also appeal to risk-averse investors given its decent dividend yield and relatively defensive earnings," it said in a report.
For the first nine months of 2011, Malaysia's adex grew 10.4% year-on-year and the momentum is expected to spill over to 2012, with adex likely to close at two times OSK's 2012 GDP growth forecast of 5.2%.
"It is expected to be boosted by upcoming major adex-friendly events such as the national snap polls and Euro 2012 in the middle of the year. Newspapers remain the largest advertising medium with more than 50% share of total adex. We believe that MCIL could again emerge as a key beneficiary, bolstered by its stranglehold in the Chinese daily segment as its adex share approaches a new high of 75%," OSK said.
With over 40% of its FY11 operating costs coming from newsprint, MCIL is expected to benefit from newsprint prices that are likely to hover at the current US$600-650 per tonne in 2012, given worries over the global economy and Europe's deepening sovereign debt crisis.
"In the event of a sharp spike in newsprint prices, which we believe is unlikely at this point of time, the negative impact would be partially mitigated by continued weakness in the USD against RM, for which we are targeting to close the year at 3.0 compared with 3.15 currently," said OSK.
As of Q1 FY03/12, MCIL was sitting on a net cash hoard of RM370 million, representing 15% of its current market capitalisation. OSK said the group is a cash cow in the making with its strong cash generation of an estimated RM320 million a year.
"And given its minimal annual capital expenditure of RM30 million, we believe that dividend surprises are likely, going forward, to right-size the group's balance sheet. We are incorporating a payout ratio of 60% for the next two years, which translates into a decent yield of more than 5% per annum," it added.
MCIL is the result of a mega-merger involving Sin Chew and Nanyang, with Hong Kong's Ming Pao. Today, it has four core daily publications in Malaysia namely Sin Chew, Nanyang, China Press and Guang Ming, one in Hong Kong under the Ming Pao brand, and a few magazine titles as well as a Hong Kong travel business.
The group's core Malaysian operations still contribute a significant 85% of group EBIT given its near-monopoly of Chinese daily publications, with the lion's share of 85% of the market.
Just to make it more interesting... the EdgeMalaysia reported the following yesterday evening. Media Chinese Intl director sells 400000 shares
- Media Chinese Intl director sells 400,000 shares
KUALA LUMPUR (Jan 3): MEDIA CHINESE INTERNATIONAL LTd director Tiong Kiew Chiong disposed of 400,000 shares in the open market on Dec 30.
A filing to Bursa Malaysia on Tuesday showed he disposed of the shares, representing 0.03%, for RM1.19 a share.
After the disposal of the stake, Tiong’s stake was reduced to 3.607 million shares
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