► TA SECURITIES
A MEMBER OF THE TA GROUP
RESULTS UPDATE
Wednesday, August 20, 2025
FBMKLCI: 1,590.24
Sector: Media
THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY*
Star Media Group Berhad
Earnings Miss on Weaker-Than-Expected Property Development & Investment Segment
Lee Yun Leon
Tel: +603-2167 9606
yllee@ta.com.my
Review
- Star’s IHFY25 core net profit of RM0.2mn came in below our forecast and consensus estimates at 2.2% of full-year projections. The negative variance was mainly due to lower-than-expected progress billings from the Star Business Hub project and weaker-than-expected property leasing income.
- Print, Digital and Events: Revenue decreased by 3.8% YoY to RM40.6mn, mainly due to lower advertising income amidst a more challenging economic climate influenced by potential US tariffs and ongoing geopolitical tensions. However, PBT of RM2.7mn improved from a LBT of RM3.7mn, mainly driven by better operating cost control.
- Radio Broadcasting: Revenue increased by 3.0% YoY to RM6.4mn with a PBT of RM0.23mn, up 24.2% YoY from PBT of RM0.19mn. The increase was attributed to lower revenue generated from commercial airtime, sponsorship and digital revenue.
- Property Development & Investment: Revenue decreased 82.8% YoY from RM25.6mn to RM4.4mn, mainly due to higher progress billings from the Star Business Hub project for units sold in 2QFY24. Consequently, PBT recorded lower by 78.4% YoY from RM10.6mn to RM2.3mn.
- Meanwhile, Star maintained a solid balance sheet with a robust net cash position of RM352.5mn or 48.6sen/share (-4.0% QoQ, -0.3% YoY) and zero borrowings.
Impact
- We have revised our FY25/FY26/FY27 earnings estimates downward by 45.8%/40.4%/32.8% respectively, to reflect the continued underperformance across the property development & investment segments.
Outlook
- In the near term, we anticipate continued weakness in Star’s core print and radio broadcasting segments, as advertisers remain cautious on spending amid inflationary pressures and broader macroeconomic challenges. That said, we remain cautiously optimistic on the property development segment, supported by ongoing sales recognition from the Star Business Hub project and higher occupancy in its investment properties. We also see potential M&A opportunities as a strategic avenue for Star to broaden its revenue base.
Valuation & Recommendation
- Corresponding to our earnings revision, our TP for Star is revised slightly downward to RM0.355 (previously RM0.36) based on a P/BV of 0.36x CY25F BV, with an ESG Premium of 3%. Maintained Sell.
Share Information
| Bloomberg Code | STAR MK |
|---|---|
| Stock Code | 6084 |
| Listing | Main Market |
| Share Cap (mn) | 724.8 |
| Market Cap (RMmn) | 275.4 |
| 52-wk Hi/Lo (RM) | 0.441/0.348 |
| 12-mth Avg Daily Vol (‘000 shrs) | 684.1 |
| Estimated Free Float (%) | 36.7 |
| Beta | 0.3 |
| Major Shareholders (%) | |
| Malaysian Chinese Association – 43.2 | |
| Huaren Holdings Sdn Bhd – 5.0 |
Forecast Revision
| FY25 | FY26 | |
|---|---|---|
| Forecast Revision (%) | (45.8) | (40.4) |
| Net profit (RMmn) | 4.8 | 6.2 |
| Consensus | 8.9 | 10.4 |
| TA’s / Consensus (%) | 54.4 | 59.4 |
| Previous Rating | Sell (Maintained) | |
| Consensus Target Price | 0.37 |
Financial Indicators
| FY25 | FY26 | |
|---|---|---|
| Net gearing (x) | Net Cash | Net Cash |
| CFPS (sen) | 1.9 | 4.4 |
| P/CFPS (x) | 19.7 | 8.6 |
| ROAA (%) | 0.7 | 0.9 |
| ROAE (%) | 0.6 | 0.8 |
| NTA/Share (RM) | 1.0 | 1.0 |
| Price/ NTA (x) | 0.4 | 0.4 |
Scorecard
| % of FY | ||
|---|---|---|
| vs. TA | 2.2 | Below |
| vs. Consensus | 2.2 | Below |
Share Performance (%)
| Price Change | STAR | FBM KLCI |
|---|---|---|
| 1 mth | (2.6) | 4.2 |
| 3 mth | (3.7) | 2.2 |
| 6 mth | 3.6 | 0.6 |
| 12 mth | (1.4) | (3.5) |
Source: Bloomberg
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Table 1: Earnings Summary
| FYE Dec (RM mn’) | FY23 | FY24 | FY25F | FY26F | FY27F |
|---|---|---|---|---|---|
| Revenue | 220.0 | 247.6 | 236.2 | 252.1 | 253.7 |
| EBITDA | 24.6 | 29.0 | 17.5 | 19.7 | 22.2 |
| EBITDA margin (%) | 11.2 | 11.7 | 7.4 | 7.8 | 8.8 |
| Dep. & amortisation | (15.8) | (15.2) | (10.9) | (11.5) | (10.9) |
| EBIT | 8.8 | 13.8 | 6.6 | 8.3 | 11.4 |
| Net finance costs | (0.5) | (0.5) | (0.2) | (0.1) | (0.1) |
| Associates/JV | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| EI | 0.0 | 54.8 | 0.0 | 0.0 | 0.0 |
| Profit before tax | 8.3 | 68.2 | 6.4 | 8.1 | 11.3 |
| MI | 0.0 | 0.0 | 0.0 | 0.0 | 0.2 |
| Net profit | 7.5 | 66.8 | 4.8 | 6.2 | 8.7 |
| Core net profit | 7.5 | 12.0 | 4.8 | 6.2 | 8.7 |
| Core EPS (sen) | 1.0 | 1.6 | 0.7 | 0.9 | 1.2 |
| Core EPS growth (%) | 8.2 | 59.7 | (58.2) | 27.5 | 41.4 |
| PER (x) | 40.6 | 23.3 | 56.9 | 44.6 | 31.5 |
| DPS (sen) | 1.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Dividend yield (%) | 2.6 | 0.0 | 0.0 | 0.0 | 0.0 |
Table 2: IHFY25 Results Analysis
| FYE Dec (RM mn’) | 2QFY24 | 1QFY25 | 2QFY25 | QoQ (%) | YoY (%) | IHFY24 | IHFY25 | YoY (%) |
|---|---|---|---|---|---|---|---|---|
| Revenue | 74.1 | 59.4 | 51.5 | (13.4) | (30.5) | 127.4 | 110.9 | (12.9) |
| Print, digital and events | 42.2 | 35.4 | 40.6 | 14.7 | (3.8) | 85.0 | 76.1 | (10.5) |
| Broadcasting | 6.3 | 8.8 | 6.4 | (27.0) | 3.0 | 13.5 | 15.3 | 12.8 |
| Property Dev. & Inv. | 25.6 | 16.5 | 4.4 | (73.2) | (82.8) | 30.6 | 20.9 | (31.5) |
| EBITDA | 11.5 | 4.2 | 4.4 | 4.0 | (61.9) | 15.4 | 8.6 | (44.0) |
| Dep. and amortisation | (3.8) | (3.7) | (3.9) | 7.1 | 2.1 | (7.7) | (7.6) | (1.3) |
| EBIT | 7.7 | 0.6 | 0.5 | (16.1) | (93.9) | 7.7 | 1.0 | (86.6) |
| Finance income | 0.1 | 0.2 | 0.1 | (59.0) | (1.0) | 0.1 | 0.3 | >100 |
| Finance cost | (0.2) | (0.1) | (0.1) | (6.8) | (23.0) | (0.4) | (0.3) | (22.2) |
| EI | (0.1) | 0.0 | (0.1) | n.m | >100 | (0.1) | (0.1) | >100 |
| Profit before tax | 7.6 | 0.7 | 0.3 | (51.2) | (95.8) | 7.4 | 1.0 | (86.9) |
| Print, digital and events | (3.7) | (3.5) | 2.7 | n.m | n.m | (2.1) | (0.8) | (63.7) |
| Broadcasting | 0.2 | 1.9 | 0.2 | (87.7) | 24.2 | 0.8 | 2.1 | >100 |
| Property Dev. & Inv. | 10.6 | 7.6 | 2.3 | (69.6) | (78.4) | 12.0 | 9.9 | (17.5) |
| Others | 0.4 | (5.3) | (4.9) | (6.7) | n.m | (3.3) | (10.3) | >100 |
| Tax | (0.1) | (0.3) | (0.5) | 62.4 | >100 | (0.1) | (0.9) | >100 |
| MI | 0.0 | 0.0 | 0.0 | n.m | n.m | 0.0 | 0.0 | n.m |
| Net profit | 7.5 | 0.3 | (0.2) | n.m | n.m | 7.3 | 0.1 | (98.9) |
| Core net profit | 7.5 | 0.3 | (0.1) | n.m | n.m | 7.3 | 0.2 | (97.3) |
| Core EPS | 1.0 | 0.0 | (0.0) | n.m | n.m | 1.0 | 0.0 | n.m |
| DPS | 0.0 | 0.0 | 0.0 | n.m | n.m | 0.0 | 0.0 | n.m |
Profitability ratios (%)
| EBITDA margin | 15.6 | 7.1 | 8.5 | 1.4 | (7.0) | 12.1 | 7.8 | (4.3) |
| EBIT margin | 10.4 | 0.9 | 0.9 | (0.0) | (9.5) | 6.0 | 0.9 | (5.1) |
| PBT margin | 10.2 | 1.1 | 0.6 | (0.5) | (9.6) | 5.8 | 0.9 | (4.9) |
| Print, digital and events | (8.7) | (9.8) | 6.7 | 16.6 | 15.5 | (2.4) | (1.0) | 1.5 |
| Broadcasting | 0.4 | 21.2 | 3.6 | (17.7) | 3.1 | 6.0 | 13.8 | 7.8 |
| Property Dev. & Inv. | 41.5 | 45.8 | 52.1 | 6.3 | 10.6 | 39.1 | 47.1 | 8.0 |
| Tax rate | (0.8) | (51.8) | (172.6) | (120.8) | (171.8) | (1.2) | (91.4) | (90.2) |
| Core PAT margin | 10.2 | 0.5 | (0.2) | (0.8) | (10.4) | 5.8 | 0.2 | (5.6) |
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Sector Recommendation Guideline
- OVERWEIGHT:
- The total return of the sector, as per our coverage universe, exceeds 12%.
- NEUTRAL:
- The total return of the sector, as per our coverage universe, is within the range of 7% to 12%.
- UNDERWEIGHT:
- The total return of the sector, as per our coverage universe, is lower than 7%.
Stock Recommendation Guideline
- BUY :
- Total return of the stock exceeds 12%.
- HOLD :
- Total return of the stock is within the range of 7% to 12%.
- SELL :
- Total return of the stock is lower than 7%.
- Not Rated:
- The company is not under coverage. The report is for information only.
Total Return of the stock includes expected share price appreciation, adjustment for ESG rating and gross dividend. Gross dividend is excluded from total return if dividend discount model valuation is used to avoid double counting.
Total Return of the sector is market capitalisation weighted average of total return of the stocks in the sector.
ESG Scoring & Guideline
| Scoring | Environmental | Social | Governance | Average |
|---|---|---|---|---|
| ★★★★ | ★★★★ | ★★★★ | ★★★★ | |
| Remark | While print business is not environmentally friendly, Star has on-going initiatives to optimise material, energy and water usage, and carbon emissions including printing on 100% recycled newsprint and recycling and reusing waste. | Star is committed to responsible content curation. Content teams are guided by strict guidelines and standard operating procedures to ensure consistent delivery of credible news. Regularly conducts employee engagement with areas for improvement identified and addressed. | Association with political linkage has muted governance score. However, the group has been committed to the highest standards of corporate governance best practices and guidelines. Board of directors’ independence at 62%. Improvement on board gender diversity (14% female) would also bode well for its governance score. |
- ★★★★★ (≥80%): Displayed market leading capabilities in integrating ESG factors in all aspects of operations, management and future directions. +5% premium to target price
- ★★★★ (60-79%): Above adequate integration of ESG factors into most aspects of operations, management and future directions. +3% premium to target price
- ★★★ (40-59%): Adequate integration of ESG factors into operations, management and future directions. No changes to target price
- ★★ (20-39%): Have some integration of ESG factors in operations and management but are insufficient. -3% discount to target price
- ★ (<20%): Minimal or no integration of ESG factors in operations and management. -5% discount to target price
Disclaimer
The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as a solicitation for contracts. We accept no liability for any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein.
As of Wednesday, August 20, 2025, the analyst, Lee Yun Leon, who prepared this report, has interest in the following securities covered in this report:
(a) nil
Kaladher Govindan – Head of Research
TA SECURITIES HOLDINGS BERHAD 197301001467 (14948-M)
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