Lower ad market assumptions; limited upside
We revised our
valuation for DYH due to lower than expected TV ad spend (+1% y/y in 1H12). We
now forecast 3% increase in TV ad spend (+6% previously). TV rating measurement
finally restarted in mid-Sep’12 after nine months of disruption and should
increase the growth of TV ad market in 2H12 (+3% y/y), in our view.
DYH announced TL158mn
net earnings in 1H12. Other than TL143mn gain coming from Hurriyet’s HQ sale in
1Q12 (vs. our TL130mn estimate), the company recorded a TL46mn one-off gain on
cancellation of call option related to Eko TV in 2Q12. Also, we were expecting
the gain on D&R sale (TL80mn) as profit from discontinued operations in
P&L but the company booked the gain (TL108mn) under its equity. Those
changes have reduced our 2012E net profit estimate by 14% to TL183mn now.