KUALA LUMPUR: Media Prima Bhd
's traditional key TV and publishing segments are expected to stay muted in the near term due to the lack of adex boosting mega events in 2019.
Given the challenging environment, Affin Hwang Capital research said that there is a possibility for further manpower rationalisation as the current staff count is still high in view of the shrinking operations.
In a research note, Affin Hwang said Media Prima's new revenue streams are expected to take the lead in driving the group's earnings in the long run, likely post 2020.
It noted that the group had initiated transformational changes to unlock opportunities in its existing businesses.
"This comes in line with MPR’s Odyssey transformational plan to reinvent the group as a digital first content and commerce entity," it said.
However, the research house said contribution from the group's non-core, digital segments are still unable to offset losses in the core divisions.
For 2018, Affin Hwang projects a core loss of RM90.9mil for Media Prima and a narrower loss of RM38.1mil for 2019.
"We take comfort that management is taking various measures to unlock its existing assets through digital innovation and commerce-oriented strategies in addition to cost rationalization exercises.
"Nevertheless, we believe more time is needed before these non-core/digital segments can generate sufficient earnings to cushion the drag caused by the TV and publishing segments."
Affin Hwang maintained its sell rating on Media Prima with a target price of 30 sen based on 0.9x 2019E NTA per share.
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