Overview of the Thai Media Sector
The Thai media sector is currently navigating an unexciting earnings outlook for 4Q24, with most companies expected to report flat year-on-year (yoy) earnings. Despite these challenges, there are glimmers of hope as the sector aligns with improving GDP forecasts and ongoing structural developments. UOB Kay Hian maintains a MARKET WEIGHT stance on the sector, with top picks including Major Cineplex Group (MAJOR) and Plan B Media (PLANB).
Plan B Media (PLANB)
Recommendation: BUY
Target Price: Bt9.00
Current Price: Bt6.80
Upside: 32.4%
PLANB stands out as the market leader in Thailand’s out-of-home (OOH) media sector. The company’s earnings are projected to grow yoy in 4Q24, driven by increased media capacity and robust OOH advertising momentum, which has been less impacted by digital media disruptions. Seasonal factors, particularly agencies spending budgets in the final quarter, and an improved gross profit margin from a favorable product mix further bolster PLANB’s performance.
However, revenue growth in 4Q24 is expected to slow quarter-on-quarter (qoq) due to the absence of engagement marketing. Despite this, PLANB’s strategic investments in expanding digital media capacity and adopting new technologies position it well for future growth.
Major Cineplex Group (MAJOR)
Recommendation: BUY
Target Price: Bt19.00
Current Price: Bt14.20
Upside: 33.8%
MAJOR’s earnings are expected to dip yoy in 4Q24, primarily due to a decline in admission revenue. This drop is attributed to a weaker Hollywood lineup compared to 4Q23, which had three Thai movies surpassing Bt100m in revenue, while 4Q24 had only one standout film, Tee Yod 2 (Bt550m box office revenue).
Concession revenue is also projected to decrease yoy in line with falling admission figures. However, other business segments, including advertising, bowling, and a movie collaboration with BEC, are expected to see revenue growth. Looking ahead, MAJOR is poised to benefit from a strong 2025 movie lineup featuring blockbusters like Avatar 3, Zootopia 2, and Jurassic World, as well as the continued success of Thai films. This positions the company for a stronger financial performance in 2025, making it a compelling investment opportunity.
The One Enterprise (ONEE)
Recommendation: BUY
Target Price: Bt4.81
Current Price: Bt3.62
Upside: 32.9%
ONEE has demonstrated resilience in a challenging market. The company’s revenue for 4Q24 is expected to remain flat qoq and grow yoy, supported by popular TV content and the release of three major shows that captured a wide audience. This strong content performance has driven incremental revenue in other segments such as copyright and artist management.
However, revenue from events and concerts is projected to decline as the company spreads fan meetings and concerts across different quarters. Despite high competition in the media industry, ONEE has managed to gain market share due to its robust content strategy and the restructuring efforts of competitors. This positions ONEE well to benefit directly from a rebound in TV advertising expenditure.
Bangkok Entertainment Company (BEC)
Recommendation: HOLD
Target Price: Bt4.50
Current Price: Bt3.80
Upside: 18.4%
BEC faces headwinds from sluggish TV advertising expenditure, which remains its primary revenue source. While the company’s restructuring efforts aim to reduce costs, no significant catalysts are on the horizon to drive substantial growth. The target price is pegged at 31x 2025F earnings, reflecting a cautious outlook. Investors may want to hold their positions, awaiting clearer signs of improvement in the TV advertising landscape.
Sector Catalysts
The Thai media sector is poised to benefit from several macroeconomic and industry-specific factors:
- Economic Growth: Thailand’s GDP is projected to grow by 4% in 2025 and 5% in 2026, potentially boosting advertising expenditure.
- Entertainment Complex Act: The proposed legislation could expand OOH media opportunities.
- Soft Power Initiatives: Investments in local content like Thai boxing and e-sports may shift advertising spending towards digital and OOH channels.
- Film Industry Incentives: Revised cash rebate policies for foreign film shoots could attract large-scale productions, enhancing Thailand’s reputation as a filming destination.
- Blockbuster Movie Lineup: A robust 2025 lineup across Hollywood and Thai films is expected to drive cinema revenues.
Conclusion
The Thai media sector presents a mixed bag of opportunities and challenges. While traditional TV channels like BEC face hurdles from digital disruption, players like PLANB and MAJOR are well-positioned to capitalize on emerging trends and economic recovery. The report by UOB Kay Hian underscores the importance of strategic content, technological innovation, and capitalizing on macroeconomic growth to navigate the evolving media landscape.
