Company Update

08 Agustus 2019

MNCN 1H19 - MNC Sekuritas Equity Report

PT Media Nusantara Citra Tbk (MNCN)

Advertising, Printing and Media


1H19 Results: Stellar Performance, Yet Innovative


1H19 Performance: Exceeded Expectation with 81.88% YoY Growth in Net Profit
MNCN booked net profit attributed to the owner of its parent entity of IDR1.16 trillion or increased by 81.88% YoY in 1H19 with 27.23% NPM (vs. 17.25% in 1H18). MNCN’s revenue reached IDR4.25 trillion in 1H19, growing 15.24% YoY from IDR3.69 trillion in 1H18. The increase was attributed to growth across all lines of business in which advertising revenue grew by 13.80% YoY to IDR4.03 trillion, most of which coming from a 318.95% YoY upsurge in digital advertising revenue. Additionally, conventional advertising revenue rose 6.97% YoY to IDR3.70 trillion in 1H19 (vs. IDR3.46 trillion in 1H18). Meanwhile, contentderived revenue increased by 19.98% YoY to IDR912.89 billion, altogether leading to an increased GPM of 62.86% in 1H19 (vs. 59.62% in 1H18).

MNCN was Able to Maintain Its Position as Market Leader
MNC Group is the market leader in Indonesia based on advertising, with a market share of 43% as the result of several strategies implemented through: 1) Conventional TVC spanning 15-30 seconds; 2) Creative Advertising including Built-In Ads, Virtual Ads and Squeeze Frames; as well as 3) Digital Advertising including Digital Broadcasts, Social Media and Online Portals. MNCN was able to provide superior contents, with Talent Search Programs being featured productions that contributed to most of MNC Group’s revenue. Moreover, MNC Studio as a production house under MNCN owned 39% of the drama series production market share in Indonesia. MNCN was also the market leader based on the number of viewers, holding a market share of 35.10% in FY2018 and predicted to own 39.20% in FY19E.

MNCN’s Innovations in the Digital Era: RCTI+ and Web Series
MNCN continues to strive to innovate in the current digital era. Therefore, MNC Group produced web series contents for MNCN’s YouTube channel with a subscriber count of 37.60 million in order to increase awareness of MNC Group’s contents and brand. For the same purpose, MNCN will launch a mobile application named RCTI+ on August 2019 which will allow consumers to live-stream MNC Group’s four FTA (Free-To-Air) stations (RCTI, MNCTV, GTV and iNews) thorugh their smartphones. The application will be equipped with various features such as catch-up TV and creative contents produced by MNC Group.

Valuation and Recommendation: NOT RATED
Due to affiliation, MNCS does not offer any recommendations regarding the prospects of the Company. Recommendation: NOT RATED.

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