• 3Q15 results outperformed again on TV adex share gains and less discounts.
• We rate these results as very good in light of the still subdued consumer sentiment in Malaysia.
• Raise EPS estimates by 32-34% and TP to MYR1.53 from MYR1.45. Maintain BUY call.

What’s New

3Q15 net profit of MYR44.2m (+5% YoY, +1% QoQ) brought 9M15 net profit to MYR107m (+2% YoY) which was above expectations at 107% of our full-year estimate. 9M15 revenue of MYR1.1b (-6% YoY) was also above expectations at 77% of our full-year estimate. 9M revenue has historically accounted for 70-75% of full-year revenue. The outperformance was due to 9M15 TV adex easing only 3% YoY while we expected it to fall 11% YoY. In fact, 3Q15 TV adex was even up 1% YoY. Consequently, 9M15 TV EBITDA eased only 6% YoY while we expected it to plunge 29% YoY. The above was driven TV adex share gains and narrower discount rates (Figure 2).

Surprisingly, the second interim DPS declared was down 1sen to 2sen from the first interim DPS although 3Q15 net profit was flat QoQ (9M15: 5sen DPS). On that note, we leave our 2015 DPS forecast of 8sen unchanged for now.

What’s Our View

We raise our FY15/FY16/FY17 EPS forecasts by 34%/34%/32% as we raise our TV adex share assumption from 86% to 88% and trim our discount rate assumption from 71% to 70%. Overall, we would rate these recent set of results as very good in light of the still subdued consumer sentiment in Malaysia.

In terms of valuations, we roll forward our base year to end-FY16 from end-FY15. Based on an unchanged 1x P/BV peg, we derive a new MYR1.53 TP (vs MYR1.45). We are encouraged that MPR’s good results over the last two quarters may spell the end of negative earnings revisions going forward. Maintain BUY.

Source: Maybank Research - 20 Nov 2015