KUALA LUMPUR: Affin Hwang Capital research has lowered its FY19-21E earnings projections for Media Chinese International Bhd by 5-35% due to the challenging operating environment in both publishing and travel divisions.
The research house downgraded the counter to a hold with a lower target price of 23 sen.
According to Affin Hwang, total industry adex excluding for Pay-TV and digital shrank by a furtehr 12.9% year-on-year to RM739.2mil due to catutious ad spending and a shift towards digital alternatives.
"More specifically, newspaper adex took a relatively hard beating, contracting 22.2% yoy for 2M19 to RM286.2m.
"We continue to expect adex to be muted for 2019 given the downbeat sentiment coupled with the lack of adex-boosting events," it said.
Meanwhile, the travel division has been affected by more travellers preferring web/app-based bookings while more airlines are engaging in stiff pricing competition with the group's tour operators.
"We believe the segment will only get more challenging moving forward, given the increasing popularity of digital alternatives," said Affin Hwang.
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