MEDIA Prima Bhd taking full ownership of CJ Wow Shop is seen as a positive by AmInvestment Bank, as the home shopping segment has helped to offset declines in overall revenue.
This follows the acquisition by Media Prima of the remaining stake of 51% in CJ Wow Shop from South Korean entertainment company CJ ENM Co Ltd, making CJ Wow Shop a wholly owned subsidiary of the group. Previously, Media Prima held a 49% stake in MP CJ ENM Sdn Bhd.
“We are positive on this development as the performance of its home shopping segment, which contributed 32% of the group’s revenue in the first half of its 2020 financial year, has helped to slightly offset declines in overall revenue, dragged by weakening traditional media earnings,” said AmInvest.
In Media Prima’s 1HFY20, CJ Wow Shop had recorded a revenue of RM152.8 mil, and a net profit of RM6.3 mil.
According to AmInvest, 52% of its sales are from the web and mobile platforms, with the remainder completed via TV.
“Media Prima’s home shopping segment has been a key part of the group’s previous Odyssey transformation to grow its digital and commerce revenues, leveraging the group’s overall mass reach across its platforms,” said the research house.
AmInvest maintains a hold call on Media Prima and a fair value of 22 sen, with the belief that the group’s lacklustre outlook, despite the improvements in home shopping and digital segments along with the cost rationalisation initiatives, have been priced in.
At 2.45pm, Media Prima’s shares were last done at a static 19 sen, with 7.3 million shares traded. – Sep 2, 2020
