Trimegah (LG)
MARI (re-initiate) BUY TP 320
We just published MARI report.
Indonesia is one of top five regions with the longest time spent on the internet, with average usage of 8h51m per day with promising usage on digital media consumption (2h45m on video and 1h19m on music streaming). Additionally, digital ads are expected to take about 25% of total media spending in 2022F, increase from 17% in 2017.
MARI just launched digital app called ‘NOICE’, which we think is a much better app compared to its previous foray into digital (details on report). This app will enable MARI to benefit from the upside trend in Indonesian’s music streaming industry as well as increasing digital ads spending. We expect solid growth in radio driven by four new radio stations (previously only three stations) and digital’s contribution starting 2020 to drive 18% revenue CAGR, 23% EBITDA CAGR, and 28% net profit CAGR in 2018F-24F. Digital will contribute 7% to total revenue in 2020, to rise to 27% by 2024.
We re-initiate with a Buy and 22.1% upside to TP 320, which translates to 31.2x/22.3x 19/20 PE. It currently trades at 25.4x/18.3x 19/20PE.
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