CGS-CIMB Research: Star Media to sink into the red in FY20-22F

KUALA LUMPUR (Feb 28): CGS-CIMB Research has downgraded Star Media Group Bhd to “Hold” at 38 sen with a lower target price of 41 sen (from 64 sen) and said with print adex falling further than expected, Star’s FY19 core net profit came to only 74% of consensus and our full-year estimates.

In a note today, the research forecast Star to sink into the red in FY20-22F.

It said Star’s print business no longer has large enough of a profit base to cover its underperforming divisions.

“We have revised our forecasts, where we now expect the group to make losses beginning in FY20F. And with the Covid-19 outbreak, we are concerned that the events division will be unable to conduct many events in FY20F.

“Re-rating catalysts fade away with the lack of progress in monetising its assets and divesting dimsum.

“We now downgrade Star to a Hold with a lower TP of 41 sen. It is valued at 0.4x FY21F BV, 1 s.d. below its one-year mean valuation.