Ad spending boosted media performance

February 23, 2017, 09.33 AM  | Reporter: Narita Indrastiti, Sinar Putri S.Utami
Ad spending boosted media performance


JAKARTA. The ad spending performance has recovered in 2016, after had been growing in a slower pace in 2015. The data of Nielsen Advertising Information Services show, the ad spending of televisions and print media grew by 14% to Rp 134.8 trillion in 2016.

This year, the media issuers, mainly the TV stations would still record positive performance following the improvement in ad spending growth. Three main media groups, namely PT Media Nusantara Citra Tbk (MNCN), PT Surya Citra Media Tbk (SCMA) and PT Visi Media Asia Tbk (VIVA) would compete closely for the market shares in this year.

Christine Natasya, Analyst at Mirae Asset Sekuritas Indonesia said, the net ad spending growth in this year would be similar with the last year’s growth.

“The net ad spending will remain standing at single digit, similar with the last year. The media issuers still have an interesting prospect,” said Christine, Wednesday (22/2).

In January 2017, the media issuers were competing closely for the audience shares during the prime time. During this period, the audience shares of MNCN had dropped from 43.2% in December 2016 to 41.8%. Another media issuer, SCMA recorded a decrease in the audience shares from 24.8% to 23%. Meanwhile, VIVA booked 18% of audience shares.

In the quarter four of 2016, the revenues of MNCN increased by 6.1% on year on year (yoy) basis to Rp 1.5 trillion. Along the year of 2016, MNCN revenues grew by 5.5% (yoy) to Rp 6.8 trillion.

The result of Nielsen’s survey, RCTI remains the TV station with the largest audience shares at 27% during the prime time in January 2017, followed by ANTV with a 21.8% of shareholders.

Analyst at Mandiri Sekuritas Ferdy Wan said that SCMA’s shares have the most attractive prospect among the media issuers. Recently, SCMA has acquired the shares of PT Sinemart Indonesia to increase the quality of soap opera’s contents.

SCMA has launched four new soap operas. According to Ferdy, the achievement of Sinemart in producing the electronic cinema would increase the SCMA’s audience shares during prime time in March 2017.

On the other hand, Christine said, MNCN also has solid audience shares, as some soap operas aired in RCTI have a large market share. According to Christine, RCTI can maintain its revenues in this year, if the TV station is able to sustain the high audience shares.

In this year, the production costs would be lower as MNCN will no longer purchase the Sinemart products. Christine predicts that MNCN’s revenues would still grow by 9% in 2017.

Christine recommends ‘trading buy’ for MNCN’s shares with the target price of Rp 1,915 per a share. She puts SCMA on the top pick among the media shares and recommends ‘buy’ for the TV station’s shares with the target price of Rp 3,290 per a share.

Analyst at Bahana Securities Henry Wibowo favors more the shares of SCMA and recommends ‘buy’ for the TV station’s shares with the target price of Rp 2,960 per a share. (Muhammad Farid/Translator)

Editor: Barratut Taqiyyah Rafie

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