KGI Rates Media Sector “Overweight”, Expecting a Recovery from 2Q21, Top Pick: BEC-MAJOR

KGI Securities has rated Overweight on the Thai media sector, estimating that media to drop YoY in 1Q21, but strong recovery is expected in 2Q21 in anticipation of further improving economic growth and Covid-19 situation nationwide. Still, KGI preferred BEC and MAJOR on outstanding profit forecasts.

 

KGI foresaw the 1Q21 earnings of all media stocks in its coverage including BEC World Public Company Limited (BEC), Major Cineplex Group Public Company Limited (MAJOR), PLAN B Media Public Company Limited (PLANB) and VGI Public Company Limited (VGI), to decline QoQ and YoY due to i) seasonality and ii) effects from the new wave of COVID-19 infections since late December 2020.

 

However, all those stocks should see recovery from 2Q21 onward along with expected further easing of COVID-19 and improving economic growth. KGI pointed out MAJOR and BEC should have outstanding profit growth in 2021 compared to other media stocks in the coverage as:

 

i) MAJOR’s cinema revenue would be driven by a strong movie line up from 2Q21 onward, KGI has given a target price of ฿27.75/share with 32.1% upside.

 

ii) BEC is expected to see a rise in advertising revenue in 2Q21 along with a recovery in the industry coupled with greater global content licensing and larger revenue from digital platforms while its costs and expenses are expected to decrease significantly after business restructuring in 2020. KGI has given BEC a target price of ฿14.30/share with 41.6% upside.