Surya Citra Media

(SCMA IJ)
1Q17: Muted top line priced in

Trade 1Q17: Soft revenue growth & higher expenses compressed its bottom line
Di 1Q17, Surya Citra Media (SCMA/Trading Buy/TP IDR3,290) membukukan laba
Company Report
bersih sebesar IDR303bn (-11.2% QoQ; -16.2% YoY), hanya mencapai 16,5% dan
May 3, 2017 16,8% dari perkiraan konsensus kami ( 6% lebih rendah dari tingkat normal di 1Q).
Namun, tidak mengherankan karena manajemen SCMA telah memperkirakan
revenue 1Qnya melambat sebesar c.8-10%YoY karena: 1)ketidakstabilan politik
(Maintain) Trading Buy dalam pemilihan gubernur Jakarta, yang mengurangi belanja iklan FMCG dan 2)
pangsa pemirsa yang lebih rendah dibandingkan dengan Media Nusantara Citra
Target Price (12M, IDR) 3,290 (MNCN/Hold/TP Rp1,915) sejak bulan Januari sampai minggu ketiga Februrary 2017.
Akibatnya, pendapatan bersih SCMA 1Q17 turun menjadi IDR1tr (+9% QoQ;-6%YoY),
Share Price (5/2/17, IDR) 2,830 masing-masing mencapai 19.6% dan 19.9% dari perkiraan kami dan konsensus.

Expected Return 16.3% UNVR to raise its rate card for TV adex yet keep budget same as last year
Untuk 2Q17, kami percaya revenue SCMA akan lebih baik karena 1)Lebaran
sepenuhnya bergeser ke 2Q,di mana ada tambahan pendapatan dari program
Consensus OP (17F, IDRtr) 2.4
sahur, 2) peningkatan pangsa pemirsa sejak akhir-Februari 2017, yang efeknya akan
terlihat di 2Q dan seterusnya; 3) harapan akan pangsa pemirsa yang stabil ke
Industry P/E (17F, x) 19.3 depan, yang akan meningkatkan rate card SCMA yang lebih tinggi dan begitupun
Benchmark P/E (17F, x) 16.2 pendapatan. Namun, kami mencatat bahwa beberapa stasiun TV yang
Market Cap (IDRbn) 41,671.6 menayangkan sinetron, termasuk SCMA, mengalami sedikit penurunan pangsa
Shares Outstanding (mn) 14,621.6 pasar pada bulan April 2017 karena pemilihan gubernur Jakarta.
Free Float (mn) 5,795.7

Institutional Ownership (%) 13.4 Kami percaya, pertumbuhan kuartal berikutnya akan didukung oleh UNVR yang
Beta (Adjusted, 24M) 1.1 akan meningkatkan rate card sebesar 9%YoY tahun ini (walaupun budjet iklan akan
52-Week Low (IDR) 2,130 sama dengan tahun lalu).
52-Week High (IDR) 3,550
Consensus OP (17F, IDRtr) 2.4 Selain itu, mengingat kenaikan pangsa pemirsa SCMA yang sejak akhir Februari
Industry P/E (17F, x) 19.3 tahun ini, kami berharap SCMA dapat menjual slot iklan lebih ke FMCG lain yang
tertarik, salah satunya adalah P&G yang memiliki anggaran untuk belanja iklan TV
(%) 1M 6M 12M
tahun ini. Meskipun kami tidak memiliki rincian mengenai jumlah FMCG yang ingin
Absolute 4.8 12.7 -13.7
meningkatkan belanja iklan mereka, kami percaya bahwa pertumbuhan
Relative 2.9 7.7 -31.8
pendapatan SCMA akan berasal dari rate card yang lebih tinggi ketimbang
(D-1yr=100) JCI SCMA pertumbuhan volume.
140
120
Retain Trading Buy
100
80 SCMA adalah top pick kami di sektor media. TP kami sebesar Rp3,290 didasarkan
60
pada P/E 2017F sebesar 26.3x
11/16
10/16

12/16

2/17
5/16
6/16
7/16
8/16
9/16

1/17

3/17
4/17
5/17

PT. Mirae Asset Sekuritas Indonesia FY (Dec.) 12/13 12/14 12/15 12/16 12/17F 12/18F
Revenue (IDRbn) 3,694.7 4,075.2 4,238.0 4,524.1 5,129.2 5,642.1
Media
Gross Profit (IDRbn) 2,312.9 2,590.8 2,711.8 2,741.7 3,239.6 3,563.5
Christine Natasya Operating Profit (IDRbn) 1,758.8 1,928.0 2,014.5 2,003.3 2,402.5 2,642.7
+62-21-515-1140 (ext 233) Net profit (IDRbn) 1,285.9 1,457.7 1,521.6 1,511.1 1,830.8 2,016.9
natasya@miraeasset.co.id EPS (IDR) 87.9 99.7 104.1 103.3 125.2 137.9
BPS (IDR) 186.4 236.3 215.2 234.3 287.5 338.0
P/E (x) 32.2 28.4 27.2 27.4 22.6 20.5
P/B (x) 15.2 12.0 13.2 12.1 9.8 8.4
ROE (%) 48.6 47.2 46.1 46.0 48.0 44.1
ROA (%) 32.9 33.2 32.7 32.2 34.9 33.0
Note: NP refers to net profit attributable to controlling interests
Source: Company data, Mirae Asset Sekuritas Indonesia Research estimates

PLEASE SEE ANALYST CERTIFICATIONS AND IMPORTANT DISCLOSURES & DISCLAIMERS IN APPENDIX 1 AT THE END OF REPORT.
May 3, 2017 Surya Citra Media

Figure 1. Mirae Asset Sekuritas Indonesia Research Cartoon

Source: Mirae Asset Sekuritas Indonesia Research

Mirae Asset Sekuritas Indonesia Research 2

 May 3, 2017 Surya Citra Media

Table 2. 1Q17 earnings review IDRbn

1Q16 2Q16 3Q16 4Q16 1Q17 QoQ YoY Mirae Achievement
Asset's %
FY17F
Net revenue 1,069.5 1,270.7 1,078.6 1,105.3 1,005.4 (9.0) (6.0) 5,129.2 19.6%
Program and broadcasting expense -387.5 -456.9 -482.2 -455.9 -407.8 (10.6) 5.2
Gross profit 682.0 813.9 596.4 649.4 597.7 (8.0) (12.4) 3,239.6 18.4%
Operating expenses -198.6 -189.8 -158.6 -191.4 -194.9 1.8 (1.9)
Operating profit 483.4 624.1 437.9 458.0 402.8 (12.1) (16.7) 2,402.5 16.8%
Interest income 12.9 12.8 9.2 12.0 1.9 (84.5) (85.4)
Finance cost -8.6 -7.8 -6.7 -5.5 -5.1 (7.2) (40.5)
Pre-tax profit 487.7 629.1 440.4 464.5 399.5 (14.0) (18.1)
Final tax expense -122.4 -155.1 -109.2 -123.2 -96.6 (21.6) (21.1)
Minority interests -3.9 0.4 3.4 0.0 0.0 NM NM
Net profit 361.4 474.5 334.6 341.3 303.0 (11.2) (16.2) 1,830.8 16.5%
Source: Company data, Mirae Asset Sekuritas Indonesia Research

Figure 2. Program and broadcasting expense breakdown Figure 3. Inventory days

days

175

165 166

155

Cost of program materials 145

135
Cost of broadcast
128
125
Satellite
115
Others
105

95

85
93% 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17

Source: Company data, Mirae Asset Sekuritas Indonesia Research Source: Company data, Mirae Asset Sekuritas Indonesia Research

Figure 4. Quarterly GPM Figure 5. GPM projection

70% Gross margin

65%
65%
64%
59.4%
60% 63%
55.3%
55% 62%
50% 61%

45% 60%

40% 59%

35% 58%
1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2014 2015 2016 2017 F 2018 F

Source: Company data, Mirae Asset Sekuritas Indonesia Research Source: Company data, Mirae Asset Sekuritas Indonesia Research

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May 3, 2017 Surya Citra Media

Figure 6. Quarterly net profit margin Figure 7. Quarterly OP margin

40% 53%
51%
38% 49%
49%
36% 47%
45%
34%
43%
32% 41% 40%
30% 39%
30%
37%
28% 35%
1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17

Source: Company data, Mirae Asset Sekuritas Indonesia Research Source: Company data, Mirae Asset Sekuritas Indonesia Research

Table 1. 1Q17 earnings run rate to our FY17 estimates (IDRbn, %)

1Q17 Mirae Asset's Achievement % Consensus FY17F Achievement %
FY17F
Net revenue 1,005 5,129 19.6 5,048 19.9
Gross profit 598 3,240 18.4 3,186 18.8
Gross profit margin 59% 63% 63%
Operating profit 403 2,402 16.8 2,385 16.9
Operating profit margin 40% 47% 47%
Net profit 303 1,831 16.5 1,805 16.8
Net profit margin 30% 36% 36%
Source: Company data, Mirae Asset Sekuritas Indonesia Research

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May 3, 2017 Surya Citra Media

Figure 8. Prime time audience share as of April 2017 Figure 9. All time audience share as of April 2017
% SCTV RCTI IVM TRANS %
MNCTV ANTV TRANS7 TVONE 25
35
GTV METRO

30 SCTV
20
RCTI
25 IVM
15 TRANS
20
MNCTV
ANTV
15 10
TRANS7

10 TVONE
GTV
5
5 METRO
TVRI1
0 0

Source: Nielsen, company data, Mirae Asset Sekuritas Indonesia Research Source: Nielsen, company data, Mirae Asset Sekuritas Indonesia Research

Figure 10. SCMAs forward P/E band

(x)

40

+2 Std Dev

35

+1 Std Dev

30

Avg PER

25

-1 Std Dev

20

-2 Std Dev

15

10
Apr-12 Apr-13 Apr-14 Apr-15 Apr-16 Apr-17

Source: Bloomberg, Mirae Asset Sekuritas Indonesia Research

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 May 3, 2017 Surya Citra Media

Profit & Loss Balance sheet

Year end Dec 31 Year end Dec 31
2015 2016 2017F 2018F 2015 2016F 2017F 2018F
(IDRbn) (IDRbn)
Revenue 4,238 4,524 5,129 5,642 Assets
Broadcasting expenses (1,526) (1,782) (1,890) (2,079) Cash and equivalents 686 455 1,121 1,578
Gross Profit 2,712 2,742 3,240 3,564 Receivables 1,412 1,534 1,582 1,740
Opex (711) (751) (851) (936) Inventories 533 689 648 712
Operating Profit 2,015 2,003 2,402 2,643 Others 213 275 268 295
Other income/(expenses) 14 12 14 15 Total current assets 2,843 2,952 3,619 4,325
Profit before income tax 2,038 2,024 2,448 2,696 Fixed assets - net 962 967 1,096 1,240
Income tax expenses (513) (510) (614) (677) Long term investments 24 26 26 26
Minority interest - - - - Others 736 777 839 874
Net profit 1,522 1,511 1,831 2,017 Total non-current assets 1,722 1,868 2,060 2,238
EBITDA 2,135 2,133 2,551 2,806 Total assets 4,566 4,821 5,679 6,563
Liabilities and equity
Short-term bank loans 150 207 219 241
Growth & margins 2015 2016F 2017F 2018F
and current maturities
Net Revenue 4.0% 10.0% 10.0% 10.0% Trade payables 260 385 345 379
EBITDA 5.2% 8.8% 9.8% 10.0% Others current liabilities 451 398 430 471
Net profit 4.4% 7.1% 12.4% 10.2% Total current liabilities 860 990 994 1,092
Profitability (%) Long term debt 207 0 0 1
Gross margin 64.0% 63.3% 63.2% 63.2% Others 85 124 143 157
Operating margin 47.5% 47.0% 46.9% 46.9% Total non-current 292 125 143 158
liabilities
EBITDA margin 50.4% 49.8% 49.7% 49.7% Total liabilities 1,152 1,115 1,138 1,249
Minority interests 267 279 338 372
Shareholders' equity 3,146 3,427 4,203 4,942
Cash Flow
Year end Dec 31
2015 2016F 2017F 2018F
(IDRbn)
CF from operation
Net profit 1,522 1,511 1,831 2,017
Depreciation/amortization 12 117 74 80
Ratio analysis
Year end Dec 31 2015 2016F 2017F 2018F
Change in working capitals (252) (170) (40) (197) Current ratio 3.3 3.0 3.6 4.0
Others 45 (97) 32 22 Quick ratio 2.7 2.3 3.0 3.3
CF from operation 1,327 1,361 1,896 1,922 Debt to equity 0.05 0.06 0.05 0.05
CF from Investments Net debt to equity net cash net cash net cash net cash
Net capex (199) (135) (218) (225)
Others 9 (29) (48) (33)
CF from investments (190) (263) (266) (258)
CF from financing
activity
Increase/(decrease) in debt (95) (149) 12 22
Increase/(decrease) in equity (4) 0 - -
Dividend payments (1,828) (1,214) (1,058) (1,282)
Others 225 43 81 52
CF from financing activity (1,701) (1,319) (964) (1,208)
Net changes in cash (565) (221) 666 456
Non cash adjustment 2 (10) - -
Ending balance 686 455 1,121 1,578

Source: Mirae Asset Sekuritas Research

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May 3, 2017 Surya Citra Media

APPENDIX 1

Important Disclosures & Disclaimers

Disclosures
As of the publication date, PT. Mirae Asset Sekuritas Indonesia, and/or its affiliates do not have any special interest with the subject company and
do not own 1% or more of the subject company's shares outstanding.

Stock Ratings Industry Ratings

Buy Relative performance of 20% or greater Overweight Fundamentals are favorable or improving
Relative performance of 10% or greater, but with
Trading Buy Neutral Fundamentals are steady without any material changes
volatility
Hold Relative performance of -10% and 10% Underweight Fundamentals are unfavorable or worsening
Sell Relative performance of -10%
* Our investment rating is a guide to the relative return of the stock versus the market over the next 12 months.
* Although it is not part of the official ratings at Mirae Asset Sekuritas Indonesia, we may call a trading opportunity in case there is a technical or
short-term material development.
* The target price was determined by the research analyst through valuation methods discussed in this report, in part based on the analysts
estimate of future earnings.
The achievement of the target price may be impeded by risks related to the subject securities and companies, as well as general market and
economic conditions.

Analyst Certification
Opinions expressed in this publication about the subject securities and companies accurately reflect the personal views of the Analysts primarily
responsible for this report. PT. Mirae Asset Sekuritas Indonesia (Mirae Asset Daewoo) policy prohibits its Analysts and members of their
households from owning securities of any company in the Analysts area of coverage, and the Analysts do not serve as an officer, director or
advisory board member of the subject companies. Except as otherwise specified herein, the Analysts have not received any compensation or any
other benefits from the subject companies in the past 12 months and have not been promised the same in connection with this report. No part of
the compensation of the Analysts was, is, or will be directly or indirectly related to the specific recommendations or views contained in this report
but, like all employees of Mirae Asset Daewoo, the Analysts receive compensation that is determined by overall firm profitability, which includes
revenues from, among other business units, the institutional equities, investment banking, proprietary trading and private client division. At the
time of publication of this report, the Analysts do not know or have reason to know of any actual, material conflict of interest of the Analyst or
Mirae Asset Daewoo except as otherwise stated herein.

Disclaimers
This report is published by Mirae Asset Daewoo, a broker-dealer registered in the Republic of Indonesia and a member of the Indonesia Stock
Exchange. Information and opinions contained herein have been compiled in good faith and from sources believed to be reliable, but such
information has not been independently verified and Mirae Asset Daewoo makes no guarantee, representation or warranty, express or implied, as
to the fairness, accuracy, completeness or correctness of the information and opinions contained herein or of any translation into English from the
Indonesian language. In case of an English translation of a report prepared in the Indonesian language, the original Indonesian language report
may have been made available to investors in advance of this report.
The intended recipients of this report are sophisticated institutional investors who have substantial knowledge of the local business environment,
its common practices, laws and accounting principles and no person whose receipt or use of this report would violate any laws and regulations or
subject Mirae Asset Daewoo and its affiliates to registration or licensing requirements in any jurisdiction shall receive or make any use hereof.
This report is for general information purposes only and it is not and shall not be construed as an offer or a solicitation of an offer to effect
transactions in any securities or other financial instruments. The report does not constitute investment advice to any person and such person shall
not be treated as a client of Mirae Asset Daewoo by virtue of receiving this report. This report does not take into account the particular investment
objectives, financial situations, or needs of individual clients. The report is not to be relied upon in substitution for the exercise of independent
judgment. Information and opinions contained herein are as of the date hereof and are subject to change without notice. The price and value of
the investments referred to in this report and the income from them may depreciate or appreciate, and investors may incur losses on
investments. Past performance is not a guide to future performance. Future returns are not guaranteed, and a loss of original capital may occur.
Mirae Asset Daewoo, its affiliates and their directors, officers, employees and agents do not accept any liability for any loss arising out of the use
hereof.
Mirae Asset Daewoo may have issued other reports that are inconsistent with, and reach different conclusions from, the opinions presented in this
report. The reports may reflect different assumptions, views and analytical methods of the analysts who prepared them. Mirae Asset Daewoo may
make investment decisions that are inconsistent with the opinions and views expressed in this research report. Mirae Asset Daewoo, its affiliates
and their directors, officers, employees and agents may have long or short positions in any of the subject securities at any time and may make a
purchase or sale, or offer to make a purchase or sale, of any such securities or other financial instruments from time to time in the open market or
otherwise, in each case either as principals or agents. Mirae Asset Daewoo and its affiliates may have had, or may be expecti ng to enter into,
business relationships with the subject companies to provide investment banking, market-making or other financial services as are permitted
under applicable laws and regulations.
No part of this document may be copied or reproduced in any manner or form or redistributed or published, in whole or in part, without the prior
written consent of Mirae Asset Daewoo.

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May 3, 2017 Surya Citra Media

Distribution
United Kingdom: This report is being distributed by Mirae Asset Securities (UK) Ltd. in the United Kingdom only to (i) investment professionals
falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the Order), and (ii) high net worth
companies and other persons to whom it may lawfully be communicated, falling within Article 49(2)(A) to (E) of the Order (all such persons
together being referred to as Relevant Persons). This report is directed only at Relevant Persons. Any person who is not a Relevant Person should
not act or rely on this report or any of its contents.
United States: This report is distributed in the U.S. by Mirae Asset Securities (USA) Inc., a member of FINRA/SIPC, and is only intended for major
institutional investors as defined in Rule 15a-6(b)(4) under the U.S. Securities Exchange Act of 1934. All U.S. persons that receive this document by
their acceptance thereof represent and warrant that they are a major institutional investor and have not received this report under any express or
implied understanding that they will direct commission income to Mirae Asset Daewoo or its affiliates. Any U.S. recipient of this document wishing
to effect a transaction in any securities discussed herein should contact and place orders with Mirae Asset Securities (USA) Inc., which accepts
responsibility for the contents of this report in the U.S. The securities described in this report may not have been registered under the U.S.
Securities Act of 1933, as amended, and, in such case, may not be offered or sold in the U.S. or to U.S. persons absent registration or an applicable
exemption from the registration requirements.
Hong Kong: This document has been approved for distribution in Hong Kong by Mirae Asset Securities (HK) Ltd., which is regulated by the Hong
Kong Securities and Futures Commission. The contents of this report have not been reviewed by any regulatory authority in Hong Kong. This
report is for distribution only to professional investors within the meaning of Part I of Schedule 1 to the Securities and Futures Ordinance of Hong
Kong (Cap. 571, Laws of Hong Kong) and any rules made thereunder and may not be redistributed in whole or in part in Hong Kong to any person.
All Other Jurisdictions: Customers in all other countries who wish to effect a transaction in any securities referenced in this report should contact
Mirae Asset Daewoo or its affiliates only if distribution to or use by such customer of this report would not violate applicable laws and regulations
and not subject Mirae Asset Daewoo and its affiliates to any registration or licensing requirement within such jurisdiction.

Mirae Asset Daewoo International Network

Mirae Asset Daewoo Co., Ltd. (Seoul) Mirae Asset Securities (HK) Ltd. Mirae Asset Securities (UK) Ltd.
Global Equity Sales Team Suites 1109-1114, 11th Floor 41st Floor, Tower 42
Mirae Asset Center 1 Building Two International Finance Centre 25 Old Broad Street,
26 Eulji-ro 5-gil, Jung-gu, Seoul 04539 8 Finance Street, Central London EC2N 1HQ
Korea Hong Kong United Kingdom
China
Tel: 82-2-3774-2124 Tel: 852-2845-6332 Tel: 44-20-7982-8000

Mirae Asset Securities (USA) Inc. Mirae Asset Wealth Management (USA) Inc. Mirae Asset Wealth Management (Brazil) CCTVM
810 Seventh Avenue, 37th Floor 555 S. Flower Street, Suite 4410, Rua Funchal, 418, 18th Floor, E-Tower Building
New York, NY 10019 Los Angeles, California 90071 Vila Olimpia
USA USA Sao Paulo - SP
04551-060
Brasil
Tel: 1-212-407-1000 Tel: 1-213-262-3807 Tel: 55-11-2789-2100

PT. Mirae Asset Sekuritas Indonesia
Equity Tower Building Lt. 50
Sudirman Central Business District
Jl. Jend. Sudirman, Kav. 52-53 Jakarta Selatan
12190
Indonesia
Tel: 62-21-515-3281
Mirae Asset Securities Mongolia UTsK LLC
#406, Blue Sky Tower, Peace Avenue 17
1 Khoroo, Sukhbaatar District
Ulaanbaatar 14240
Mongolia
Mirae Asset Securities (Singapore) Pte. Ltd. Mirae Asset Securities (Vietnam) LLC
6 Battery Road, #11-01 7F, Saigon Royal Building
Singapore 049909 91 Pasteur St.
Republic of Singapore District 1, Ben Nghe Ward, Ho Chi Minh City
Vietnam
Tel: 65-6671-9845 Tel: 84-8-3911-0633 (ext.110)
Mirae Asset Investment Advisory (Beijing) Co., Ltd Beijing Representative Office
2401B, 24th Floor, East Tower, Twin Towers 2401A, 24th Floor, East Tower, Twin Towers
B12 Jianguomenwai Avenue, Chaoyang District B12 Jianguomenwai Avenue, Chaoyang District
Beijing 100022 Beijing 100022
China China

Tel: 976-7011-0806 Tel: 86-10-6567-9699 Tel: 86-10-6567-9699 (ext. 3300)

Shanghai Representative Office
38T31, 38F, Shanghai World Financial Center
100 Century Avenue, Pudong New Area
Shanghai 200120
China
Ho Chi Minh Representative Office
7F, Saigon Royal Building
91 Pasteur St.
District 1, Ben Nghe Ward, Ho Chi Minh City
Vietnam

Tel: 86-21-5013-6392 Tel: 84-8-3910-7715

Mirae Asset Sekuritas Indonesia Research 8