This document provides a sector update and analysis of the media industry in Malaysia. Some key points: 1) Advertising expenditure (adex) in March 2009 contracted only 1% year-over-year, a much better showing than previous months, driven by a 13% increase in TV adex. 2) However, the analyst maintains a cautious outlook due to difficult year-over-year comparisons and lack of major events in 2009 that boosted adex in 2008. 3) The analyst downgrades their recommendation on Media Prima and Star to Sell, as their share prices have risen ahead of underlying fundamentals in the weak economy. The media sector outlook is downgraded to Underweight.

1. Equity Research
PP11072/03/2010 (023549)
Sector update 30 April 2009
Strong Mar showing unsustainable.
Media Downgrade to Underweight
Underweight (downgraded from Neutral) Welcome relief but maintain cautious outlook. Mar ’09 total adex
recorded a much lower YoY contraction of 1% (Feb ’09: -13% YoY)
driven by TV (+13% YoY). Despite this reprieve, the high 2Q08 and
Yin Shao Yang
3Q08 total adex base will be difficult to repeat due to lack of adex
Shaoyang.y@maybank-ib.com
friendly events this year. We downgrade Star and Media Prima to Sell
(603) 2297 8692
as valuations have run ahead of fundamentals.
TV adex rebounded... Mar ’09 TV adex rose by 13% YoY driven by
higher rates at Media Prima’s TV stations (TV3, 8TV, ntv7 and TV9)
effective 1 Feb ‘09. Due to the strong showing, YTD Mar ’09 TV adex
rose 4% YoY.
… but total adex fell. Mar ’09 total adex eased 1% YoY due to the
high base set in the preceding year by the 2008 General Election adex
of RM19.6m and continued deterioration in newspaper adex (-9% YoY).
Mar ’09 represents the sixth consecutive month of YoY newspaper
adex contraction. YTD Mar ’09 total adex was down 4% YoY,
One swallow does not make a spring. While we welcome the better
showing in Mar ’09, we believe that this momentum is unsustainable.
The high adex base of RM2.7b from May ’08 to Sep ’08 was fuelled by
Euro 2008 and the Beijing Olympics adex. Due to the lack of adex
friendly events and weak economic outlook this year, it will be difficult
to repeat this feat. We maintain our total adex forecast of -3% for now.
Sell Star and Media Prima. We raise Astro and NSTP target prices to
RM2.70 and RM0.95 on a lower WACC of 10.4% and 11% (13%
previously) but maintain our Hold and Sell calls respectively. We
downgrade Star and Media Prima to Sell as we believe their share
prices have run up ahead of fundamentals. The media sector is now
downgraded to Underweight from Neutral.
Media: Comparative valuations
Company Rec Shr px Mkt TP Basis EPS (sen) PER (x) Div yield (%) P/B
cap
(RM) RMm) (RM) 09F 10F 09F 10F 09F 10F 09F 10F
Media Prima Sell 1.20 1,024.6 1.00 PER 12.1 14.4 9.9 8.3 5.0 5.8 1.6 1.5
Astro Hold 2.49 4,815.8 2.70 DCF 8.4 11.5 29.7 21.7 4.0 4.0 6.5 6.3
Star Sell 3.18 2,348.6 2.54 PER 18.3 21.9 17.3 14.5 6.6 6.6 1.9 1.9
NSTP Sell 1.17 254.2 0.95 DDM 10.0 19.8 11.7 5.9 4.3 6.8 0.3 0.3
Source: Maybank-IB

2. Media
Details of Mar ’09 adex
Adex YoY change
Television Newspapers Total adex
60.0%
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%
Nov-08
Dec-08
Oct-08
Jan-08
Jun-08
Jan-09
May-08
Feb-08
Mar-08
Feb-09
Mar-09
Jul-08
Apr-08
Aug-08
Sep-08
-10.0%
-20.0%
Source: Nielsen Media Research
Table 1: Mar ’09 adex (RMm)
Mar-09 Mar-08 YoY chg Feb-09 MoM chg
Television 164.8 146.4 12.5% 121.7 35.3%
Newspapers 264.7 292.0 -9.4% 207.6 27.5%
Magazines 10.7 12.9 -16.9% 9.0 19.2%
Radio 25.3 20.7 21.9% 16.9 49.8%
Cinema 1.1 1.0 9.5% 1.3 -10.9%
Outdoor 8.0 8.2 -2.9% 8.0 0.6%
Point Of Sale 6.5 6.3 3.5% 6.1 6.6%
Internet 3.2 2.6 25.5% 2.0 62.0%
Total 484.3 490.2 -1.2% 372.5 30.0%
Source: Nielsen Media Research
Narrower contraction. Mar ’09 total adex of RM484.3m was only 1%
lower YoY but 30% higher MoM as adex sentiment recovered from the
post-Chinese New Year trough in Feb ‘09. Excluding the 2008 General
Election adex of RM19.6m, Mar ’09 total adex was actually 3% higher
YoY. We expected Mar ’09 total adex to continue declining markedly
due to the weak economic environment.
TV shone but newspapers continued to fade. Mar ’09 TV adex of
RM164.8m was 13% higher YoY and 35% higher MoM. We understand
the outperformance was due to rate card increases at Media Prima’s
TV stations. Mar ’09 newspaper adex of RM264.7m was 9% lower
YoY, representing the sixth consecutive month of YoY contraction.
Table 2: YTD Mar ’09 adex (RMm)
YTD Mar-09 YTD Mar-08 YoY chg
Television 431.6 416.0 3.7%
Newspapers 731.0 802.9 -9.0%
Magazines 30.2 33.5 -9.8%
Radio 66.8 61.2 9.2%
Cinema 5.0 5.2 -3.8%
Outdoor 24.5 23.9 2.6%
Point Of Sale 19.7 18.9 4.7%
Internet 7.3 6.7 9.3%
Total 1,316.2 1,368.2 -3.8%
Source: Nielsen Media Research
30 April 2009 Page 2 of 5

3. Media
YTD total adex down 3.8% YoY. Due to its strong showing in Mar ’09,
YTD Mar ’09 TV adex of RM431.6m was 4% higher YoY. YTD Mar ’09
newspaper adex of RM731.0m was 9% lower YoY. The deterioration in
newspaper adex poses earnings risk to Star and NSTP. We estimate
that every 1% contraction in newspaper adex will reduce our full-year
EPS estimates by 2%.
Table 3: Mar ’09 top 10 advertisers (RMm)
Categories Mar-09 Categories Mar-08 Categories Feb-09
Government Institutions-Local 24.2 Mobile Line Services 21.4 Government Institutions-Local 16.9
Mobile Line Services 23.5 Political Parties 19.6 Mobile Line Services 13.3
Face Care-Woman 15.3 Government Institutions-Local 14.0 Face Care-Woman 10.1
University 13.8 Face Care-Woman 10.8 Tonic & Vitamin 8.2
Fast Food Centre 11.0 University 10.2 Fast Food Centre 7.7
Hair Shampoo & Conditioner 9.0 Hair Shampoo & Conditioner 9.6 Airline 7.6
Tonic & Vitamin 8.5 Bank/Finance-Corporate 7.8 Hypermarket 7.0
Hypermarket 8.3 College/Institution 7.7 Hair Shampoo & Conditioner 6.9
Cinema Advertising 7.3 Cinema Advertising 7.7 Mobile Interactive Services 6.7
Amusement Centre 7.0 Dessert 7.0 Cinema Advertising 6.4
Top 10 total 128.0 Top 10 total 115.8 Top 10 total 90.8
% of total adex 26.4% % of total adex 23.6% % of total adex 24.4%
Source: Nielsen Media Research
Table 4: YTD Mar ’09 top 10 advertisers (continued) (RMm)
Categories YTD Categories YTD
Mar-09 Mar-08
Mobile Line Services 58.1 Mobile Line Services 63.6
Government Institutions-Local 55.9 Government Institutions-Local 54.3
Absent in 2009 – the 2008
Face Care-Woman 37.0 Political Parties 30.8
General Elections effect
Hypermarket 30.4 Face Care-Woman 29.5
Fast Food Centre 27.5 Hair Shampoo & Conditioner 27.6
University 26.5 Residential Estate 23.7
Tonic & Vitamin 24.7 Cinema Advertising 23.0
Mobile Interactive Services 21.9 Airline 20.5
Hair Shampoo & Conditioner 20.7 Tonic & Vitamin 19.9
Cinema Advertising 20.5 University 19.8
Top 10 total 323.3 Top 10 total 312.7
% of total adex 24.6% % of total adex 22.9%
Source: Nielsen Media Research
Table 5: Share of total adex
Mar-09 Mar-08 Feb-09 YTD Mar-09 YTD Mar-08
Markedly higher Television 34.0% 29.9% 32.7% 32.8% 30.4%
Newspapers 54.7% 59.6% 55.7% 55.5% 58.7%
Magazines 2.2% 2.6% 2.4% 2.3% 2.5%
Radio 5.2% 4.2% 4.5% 5.1% 4.5%
Cinema 0.2% 0.2% 0.3% 0.4% 0.4%
Outdoor 1.7% 1.7% 2.1% 1.9% 1.7%
Point Of Sale 1.3% 1.3% 1.6% 1.5% 1.4%
Internet 0.7% 0.5% 0.5% 0.6% 0.5%
Total 100.0% 100.0% 100.0% 100.0% 100.0%
Source: Nielsen Media Research
High 2Q08 and 3Q08 base difficult to repeat. While we are relieved
that Mar ’09 total adex recorded a much narrower YoY contraction (Feb
’09: -13% YoY), we take the view that this momentum is unsustainable.
The high adex base of RM2.7b from May ’08 to Sep ’08 was fuelled by
Euro 2008 and the Beijing Olympics adex. Due to the lack of adex
friendly events and weak economic prospects this year, we opine that it
is difficult to repeat this feat.
30 April 2009 Page 3 of 5

4. Media
Valuation and recommendation
Upgrading Astro TP, maintain Hold. We apply a lower WACC of
10.4% to Astro (13% previously) as we lower our risk free rate
assumption to 4% (5% previously; 10-year Malaysian Government
Securities yield fell from 5% to 3.9% over the last year) and equity risk
premium to 7.5% (8% previously), and as Astro assumes more debt.
We upgrade our DCF derived target price from RM2.00 to RM2.70 as
we also remove previous 20% discount to end-FY10 DCF (previously
RM2.50). The risk on potential losses from its five lawsuits in Indonesia
is now reflected in the relatively higher risk premium for Astro (vis-à-vis
NSTP, see below); this was previously reflected as a discount to TP.
Upgrading NSTP TP, maintain Sell. We apply a lower WACC of 11%
to NSTP on lower risk free rate of 4% and lower equity risk premium of
6.5% (previously 13%, 5% and 8% respectively)). Although we
understand that 1Q09 will be loss making as NSTP consumes
newsprint purchased in 4Q08 at above USD900/t, earnings will likely
recover going forward on lower newsprint prices. We upgrade our
NSTP TP based on dividend discount model from RM0.82 to RM0.95.
Table 6: Astro & NSTP – WACC assumptions
Astro NSTP
New Old New Old
Risk free rate 4.0% 5.0% 4.0% 5.0%
Market risk premium 7.5% 8.0% 6.5% 8.0%
Beta 1.1 1.0 1.1 1.0
Cost of equity 12.3% 13.0% 11.0% 13.0%
Cost of debt 4.5% n.a. n.a. n.a.
Target Debt-to-Capital 25% 0% 0% 0%
Target Equity-to-Capital 75% 100% 100% 100%
WACC 10.4% 13.0% 11.0% 13.0%
Source: Maybank-IB
Star’s valuations expensive, downgrade to Sell. According to
Nielsen Media Research, Star’s YTD Mar ’09 adex contraction has
been severe (>20% YoY) and valuations remain rich at 17x 2009 PER.
As we factored only 3% adex contraction in 2009, we expect 1Q09
results to disappoint. If earnings continue to weaken, dividends (2008:
21sen) will likely disappoint as well. We downgrade Star from Fully
Valued to Sell. RM2.54 TP unchanged on 10x 2010 PER ex-cash.
Primedia-ABC5 concerns overhang at Media Prima, downgrade to
Sell. We are concerned that the RM5m per month expense to support
its Philippine investment Primedia-ABC5 (until it is disposed to a media
fund) will impair its ability to pay dividends and pare debt. Media Prima
is trading at par to the regional average of 8x 2010 PER but we believe
it should trade at a discount as it has yet to dispose Primedia-ABC5 to
the media fund after more than a year. We ascribe 7x 2010 PER (6x
previously) or 1x discount to regional average and arrive at RM1.00
target price (RM0.86 previously). Downgrade from Fully Valued to Sell.
Media Prima: Peer comparison
Company Country CY09 PER CY10 PER
ABS-CBN Broadcasting Philippines 10.3 10.7
BEC World Thailand 13.4 12.6
GMA Network Philippines 8.6 7.8
Media Nusantara Citra Indonesia 3.9 4.2
Surya Citra Media Indonesia 5.5 6.6
Average 8.3 8.4
Media Prima Malaysia 9.9 8.3
Source: Bloomberg
30 April 2009 Page 4 of 5

5. Media
Definition of Ratings
Maybank Investment Bank Research uses the following rating system:
STRONG BUY Total return is expected to exceed 20% in the next 12 months; high conviction call
BUY Total return is expected to be above 10% in the next 12 months
HOLD Total return is expected to be between above 0% to 10% in the next 12 months
FULLY VALUED Total return is expected to be between -10% and 0% in the next 12 months
SELL Total return is expected to be below -10% in the next 12 months
TRADING BUY Total return is expected to be between 10-20% in the next 6 months arising from positive newsflow e.g. mergers and
acquisition, corporate restructuring, and potential of obtaining new projects. However, the upside may or may not be
sustainable
Applicability of Ratings
The respective analyst maintains a coverage universe of stocks, the list of which may be adjusted according to needs. Investment ratings are
only applicable to the stocks which form part of the coverage universe. Reports on companies which are not part of the coverage do not
carry investment ratings as we do not actively follow developments in these companies.
Some common terms abbreviated in this report (where they appear):
Adex = Advertising Expenditure FCF = Free Cashflow PE = Price Earnings
BV = Book Value FV = Fair Value PEG = PE Ratio To Growth
CAGR = Compounded Annual Growth Rate FY = Financial Year PER = PE Ratio
Capex = Capital Expenditure FYE = Financial Year End QoQ = Quarter-On-Quarter
CY = Calendar Year MoM = Month-On-Month ROA = Return On Asset
DCF = Discounted Cashflow NAV = Net Asset Value ROE = Return On Equity
DPS = Dividend Per Share NTA = Net Tangible Asset ROSF = Return On Shareholders’ Funds
EBIT = Earnings Before Interest And Tax P = Price WACC = Weighted Average Cost Of Capital
EBITDA = EBIT, Depreciation And Amortisation P.A. = Per Annum YoY = Year-On-Year
EPS = Earnings Per Share PAT = Profit After Tax YTD = Year-To-Date
EV = Enterprise Value PBT = Profit Before Tax
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This report is for information purposes only and under no circumstances is it to be considered or intended as an offer to sell or a solicitation
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ratings. Technical ratings may differ from fundamental ratings as technical valuations apply different methodologies and are purely based on
price and volume-related information extracted from Bursa Malaysia Securities Berhad in the equity analysis. Accordingly, investors may
receive back less than originally invested. Past performance is not necessarily a guide to future performance. This report is not intended to
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30 April 2009 Page 5 of 5