KUCHING: The media sector sees strong numbers from February’s gross advertising spending for TV and print media.
POSITIVE: February television (TV) adex grows 29.1 per cent y-o-y.
RHB Research Institute Sdn Bhd (RHB Research) stated that Chinese dailies led February’s year-on-year (y-o-y) advertising expenditure (adex) translated as plus 42.6 per cent y-o-y.
It added that the numbers being posted across the board were generally stronger with Sin Chew registering plus 35.5 per cent y-o-y, Nanyang at plus 70.8 per cent y-o-y, Guang Ming at plus 76.5 per cent y-o-y and Kwong Wah at 77.8 per cent y-o-y.
The English dailies also recorded better y-o-y figures at plus 5.4 per cent y-o-y which was led by The Star at plus 16.5 per cent y-o-y and the Malay Mail with plus 16.0 per cent y-o-y, the research house revealed.
It suggested these stronger numbers were partly offset by weaker numbers reported by The Sun at minus 20.0 per cent y-o-y and New Straits Times with minus 9.5 per cent y-o-y.
RHB Research mentioned gross adex for the Malay dailies declined by 2.6 per cent y-o-y mainly due to weaker adex for Utusan Malaysia at minus 27.9 per cent y-o-y and Berita Harian at minus 4.6 per cent y-o-y.
However, these weaker numbers were cushioned by stronger numbers reported by Kosmo at plus 41.2 per cent y-o-y and Harian Metro at plus 9.0 per cent y-o-y, it divulged.
The research house stated February television (TV) adex grew 29.1 per cent y-o-y although it was mainly a reflection of last year’s low base.
It added all the free-to-air (FTA) TV channels posted stronger y-o-y growth across the board led by TV2 with plus 120.5 per cent y-o-y of which was aided by their respective repositioning exercises last year.
Collectively, Media Prima’s channels once again posted y-o-y growth of 51.3 per cent led by 8TV’s adex growth of 74.3 per cent y-o-y and NTV7’s adex growth of 72.5 per cent growth y-o-y, RHB Research noted.
Furthemore, it mentioned that Media Prima would be the prime beneficiary of the faster recovery in TV adex.
To recap, Nielsen Media Research (NMR) suggested February’s gross adex for TV and print media rose 29.1 per cent y-o-y but was down 9.8 per cent month-on-month (m-o-m), the research firm highlighted.
It reported that the growth was led again by the TV segment with 55.3 per cent y-o-y with the print media registering a figure of 11.7 per cent y-o-y.
From an overall perspective, the research firm expected 2010 would be a relatively better year for ad spending especially as compared to 2009.
It added that historically there had been a close correlation between Gross Domestic Product (GDP) growth and adex growth with statistics showing a correlation percentage of 89.7 per cent for the period 1989 to 2008.
Based on projected 2010 GDP growth of 4.5 per cent and the average GDP multiplier of 2.1 times between 1989 and 2008, 2010 gross adex could see growth of 9.5 per cent, pointed out the research firm.
It stated adex growth for 2010 would also be supported by “ad-friendly” events such as the 2010 FIFA World Cup, Thomas and Uber Cup and the Commonwealth Games apart from higher overall ad spending anticipated as the global economy recovered.
RHB Research maintained their views for the print media players with Star’s fair value (FV) at RM3.60 per share and MCIL at RM0.92 per share.
It added the fair value for Media Prima was also unchanged at RM2.23 per share.