Good Start To The Year For Media Nusantara

In Jan 2016, Media Nusantara managed to maintain its solid performance – its prime time audience share improved 6% MoM to 46.5%, driven by a strong showing from its three TV stations. Meanwhile, Trans Corp was the top gainer in prime time audience share in Jan 2016 (+26%) due to its recently-aired programme, Improvisasi Selebriti. Surya Citra’s prime time audience share, on the other hand, continue to dip this month to 25% (-22% MoM). We maintain BUYs on Media Nusantara and Surya Citra.

Audience share dominated by Media Nusantara
Based on Nielsen’s data, Media Nusantara Citra’s (Media Nusantara) (MNCN IJ, BUY, TP: IDR2,150) prime time audience share improved in Jan 2016 and grew by 6% MoM to 46.5%. The strong growth was driven by a solid performance from its stations MNCTV (+10% MoM), GTV (+15% MoM), and RCTI (+3% MoM). We think RCTI has been able to grab market share from SCTV, as the latter’s prime time audience share dropped 2% MoM last month. Its dominant position in market share could translate to improved ad rates and greater bargaining power over advertisers.

No recovery from Surya Citra
Surya Citra Media’s (Surya Citra) (SCMA IJ, BUY, TP: IDR3,700) prime time audience share was at 25% in Jan 2016 (-22% MoM). We have not been overly impressed by SCTV’s performance in the past few months, as its prime time audience share of 10.9% (-2% MoM) was at its lowest since March 2012. We have not seen its audience share recover after its new drama series was launched in Jan 2016.

However, we think Surya Citra can recover from this low, and look forward to seeing a rebound stemming from newly-launched TV dramas scheduled to air in Feb 2016, ie Orang-Orang Pilihan, Elif Indonesia and Rahasia Cinta. Meanwhile, its Indosiar TV station’s prime time audience share fell 32% MoM after the conclusion of the previous season of its musical show D’Academy Asia.

Recovery of Trans Corp and Visi Media Asia (VIVA IJ, NR)
The top gainer in prime time audience share in Jan 2016 was Trans Corp, whose share rose to 12.2% (+26% MoM). We think its strong performance was due to its new variety show programme, Improvisasi Selebriti, that was aired on 13 Jan. Meanwhile, Visi Media Asia’s prime time audience share of 11.6% (+12% MoM) was supported by Indian drama series like Uttaran, which also made it to Nielsen’s the top 10 drama series.

Still BUYs on both media stocks under our coverage
We continue to see Media Nusantara as attractive due to its lower valuation of 8.8x FY16F P/E and strong audience share growth, which may lead to improved advertising rates. Furthermore, the new programmes like The Voice that will be aired in 1Q16 could help to maintain its audience share.

We also maintain our BUY call on Surya Citra as we believe the company will continue to modify SCTV’s content in order to improve its audience share. Its next key launch is the third season of D’Academy Asia on Indosiar in 1Q16, from which we may expect audience share growth for the station.