Malaysian traditional media advertising down 16.4%

Malaysian traditional media advertising down 16.4%

KUALA LUMPUR: CGS-CIMB’s initial expectations of an increase in total advertising expenditure (adex) for the Malaysian media sector after the repeal of the Movement Control Order did not materialize.

According to the research firm, the global economy has been affected by shortages in the supply chain of goods flowing from one product to another – exacerbated by Russia’s invasion of Ukraine, which disrupted trade flows.

“In our view, the May 2022 adex figure could be an indicator of how things are throughout the year, as Aidilfitri – arguably the biggest holiday celebration in Malaysia – falls in that month.

“While we did not rule out a year -on -year decline (yoy) at adex May 2022, we are still disappointed to see Nielsen Malaysia report that Malaysian traditional media ad sales for the month (before the discount factor) plunged by 16.4% yoy; 5M22 traditional media ad sales declined as much as 2.1% yoy.

“Sales of traditional media ads in May 2022 and 5M22 have been affected by the free -to -air (FTA) television medium – which holds more than half of the advertising pie.

“FTA segment ad sales declined by 20.1% yoy in May 2022; the yoy decline may be worse if we include Sarawak-based TVS and state-owned TV6, but that’s unfair because Nielsen only started scheduling ad sales for both channels in 2022 , “CGS-CIMB said in a note here today.

Meanwhile, the adex 5M22 FTA TV was down 5.3% yoy. MPTN, the largest private FTA TV operator in the country, saw its adex fall by 4.5% yoy in 5M22; all of its channels performed low yoy during the period, with a decline of between 1.8-32.3%-the biggest decline was the Very Drama channel, which aired in April 2022.

CGS-CIMB said, although the media industry was hit by the global economic downturn, it saw potential in Astro Malaysia and Media Prima.

“In fact, we believe investors should accumulate these stocks in the trial period for their CY22-23F yield of 5.7-9.8%-which we feel is more than enough to combat rising inflationary pressures and increasingly dim capital raising prospects.

“Astro is still an active FCF generating machine, thanks to the continued influx of its monthly pay TV subscriptions.

“Meanwhile, Media Prima has leveraged its 38 -year -old video library wisely in this era of streaming, reducing its reliance on ad sales.

CGS-CIMB said the faster-than-expected recovery in advertising spending was a potential re-rating catalyst for the media sector.

source – Dagang News

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