Screen Media's Prospects Remain Bright

The outlook for media companies' profits remains bright until 2019. Research from Citi Research Equity on Indonesian broadcasting indicates that television media companies' profits will continue to grow. In 2017, PT Visi Media Asia Tbk (VIVA)'s profit is projected to grow by 58.4 percent to Rp 648 billion. Similarly, PT Media Nusantara Citra Tbk (MNCN)'s profit is expected to increase by 22.28 percent to Rp 1.67 trillion, and PT Surya Citra Media Tbk (SCMA)'s profit is projected to rise by 14.86 percent to Rp 1.72 trillion.

VIVA's share price closed at Rp 394 per share on April 26, 2017. Therefore, VIVA's valuation is quite expensive, with a price-to-earnings ratio (PER) reaching 10 times, although still below the sector's PE ratio of 19.8 times. MNCN's share price at Rp 1,760 has a PE ratio of 14.3 times. Similarly, SCMA's share price at Rp 2,890 results in a PE ratio of 24.5 times, higher than the sector's PE ratio and the Indonesia Stock Exchange's PE ratio of 23.68 times.

Television viewership in Indonesia remains high, among both young and older demographics. Besides increasingly engaging television programming, television is still considered by producers as a key medium for product promotion. Therefore, the advertising market share for television media remains substantial despite the emergence of digital media.