Ira Sohn London: Eashwar Viswanathan Krishnan, Managing Partner of Tybourne Capital Management Trade
Idea: Media within Asia, Indonesia – PT Media Nusantara Citra TBK (OTCMKTS:PTMEY), Surya Media (SCM) India – Zee Entertainment Enterprises Limited (NSE:ZEEL) (BOM:505537), Sun TV Network Ltd. (NSE:SUNTV)
Themes: Ad spending within most developed nations is around 1% of GDP per year. Within India this is only 0.3%. Pay TV penetration across Asia, with the exception of India, is relatively low. Advertising intensity is low with room to grow. Limited alternatives for mass market reach. Looking for companies with managements with skin in the game, owner operated.
Macro worries within the region are depressing valuations.
TV advertising market is growing at double-digits
Indonesia has a low pay-tv penetration, TV advertising market is growing at double-digits for past five years. Limited supply of broadcasting rights within the market. Real term double digit growth of advertising revenue expected for many years.
PT Media Nusantara Citra TBK (OTCMKTS:PTMEY) has 42% of Indonesia’s prime-time audience and owns the country’s number one channel, which has held this position since 1989. Valuation is depressed due to macro uncertainty and litigation.
SCM – strong free cash flow paid print out in dividends. Ev/Ebitda expected to grow 17.9% over next three years.
Zee owns the largest Hindi language content library
Within India, state TV programming is poor so there is a high penetration of pay-tv within the country. The country also has a strong and growing print advertising market. Strong print advertising market with India, still growing. Zee Entertainment Enterprises Limited (NSE:ZEEL) (BOM:505537) owns the largest Hindi language content library. EV/EBITDA expected to grow 18% during the next three years. Current valuation depressed due to macro environment.