BEC World

BEC World Plc (BEC)

What’s new? Channel 7 will raise its ad rates for five prime-time shows in the range of 4-6%, effective October 1, while maintaining its no discount policy. Those shows are: 1) after-news Thai soap operas (up 4% to Bt500K/min), 2) Sen Tang Ban Therng (up 6% to Bt380K/min), 3) pre-news Thai soap operas (up 5% to Bt400K/min), 4) evening news, Monday-Sunday 19.50-20.25pm (up 5% to Bt420K/min, up 5%) and 5) celebrity news (up 5% to Bt420K/min).
Moreover, Channel 7 will increase its ad rates for 34 non-prime shows in the 2-10% range, effective Oct 1. Those non-prime time shows are Big Cinema, Khao Ded Jed See, Khao Ded Pak Duk, etc.
Super-prime ad rate rises likely in 1H13: Although BEC won’t raise its super-prime Thai drama ad rates in October (note that it reclaimed free Thai drama re-run slots in 2Q12), we think it is likely to push up super-prime ad rates in 1H13, following Channel 7’s ad rate raises in Oct 2012.
Four scenarios for super-prime ad rate increases: We have conducted four possible scenarios for BEC’s ad rate increases, effective Jan 2013, following Channel 7’s super-prime ad rate rises in Oct 2012 (Figure 2). Assuming the best-case scenario of a 4% super-prime ad rate increase and a zero discount—which would be equal to Channel 7’s effective super-prime ad rate of Bt500K/min—we would estimate that FY13 revenue and net profit would rise by 5.5% and 8.7%, respectively. We have already modeled our base-case scenario of a 4% super-prime ad rate increase and a 10% discount, effective Jan 2013, into our model.
Early-prime Thai drama ad rate rises: BEC has raised ad rates for 18.00-18.30 Thai drama shows (from Bt300K/min to Bt330K/min), effective Sept 2012. We estimate Bt43m in incremental revenue, which would boost FY13 revenue and net profit by 0.3% and 0.6%, respectively.
Action: We have rolled over our investment horizon from YE12 to YE13 and arrived at a new YE13 DCF-based target price of Bt56. Our HOLD rating stands—BEC looks fully valued under our model.