Media (NEUTRAL çè)
Times are changing the future of TV
- Internet has transformed the way we consume content. Online streaming has been gaining traction amongst consumers. Hence, we believe smart TV will be the main channel for content owners to forward integrate into the market.
- According to research done by Technavio, Global Smart TV market is forecasted to reach US$219.4bn by 2015, growing at CAGR of 20.6% from year 2011 to 2015 (See Figure #2).
- Ultimately, it all boils down to content. Therefore, content producers and providers need to deliver an exceptional entertainment content and experience to feed the vernacular demands of Malaysians.
- Media Prima could be the potential winner. Despite the change in the media landscape, we believe Astro’s position as a content aggregator would be least impacted due to its position as a market leader on top of their efforts in localising and developing their own content & keeping abreast of the technology trends.
- Maintain our NEUTRAL outlook on the sector given the lack of rerating catalyst(s) and cautious adex spending by consumers and businesses with Astro being our top pick for sector exposure.
Nestlé (HOLD çè)
9MFY14 Results In-Line
- 9MFY14 PAT of RM452.1m came in within expectations.
- Nestlé ‘s YTD topline grew marginally by 1.4% yoy from the group’s effective marketing and promotional activities despite the dampened consumer sentiment
- Exports remained on the declining trend on the back of increasingly challenging global economic environment.
- Despite the slightly higher revenue, bottomline contracted by 2% attributable to the higher costs of investments under marketing and promotional activities.
- HOLD recommendation and TP of RM66.52 based on DDM remained unchanged.
Traders Brief
Inching up towards our 1825-1834 relief rally targets
- Technically, on the back of ongoing Dow’s rebound, expectations of dovish remarks by Fed on 29-30 Oct FOMC meeting and slightly improved Eurozone economic data and positive ECB’s banks stress test), KLCI is likely to retest our short term resistance near 1825-1834 levels this week. However, the path will not be smooth as other external headlines such as the Ebola outbreak, the sliding oil prices and geopolitical tensions will continue to remain wild cards affecting market gyrations. Short term technical resistances are 1825-1834 while supports fall on 1778-1800.
- Closed positions (FIG4): We had closed our positions on GENM after hitting our R2 upside targets on 27 Oct.
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