More newspaper companies to raise cover prices?
KUALA LUMPUR: Newspaper companies are likely to follow suit and raise their cover prices after Media Chinese International Ltd said it would increase the cover price of its flagship newspaper, Sin Chew Daily, by 20 sen to RM1.50, effective March 1.
Kenanga Research said Media Chinese International also intended to raise the cover price of China Press, Guang Ming Daily and Nanyang Siang Pau by 20 sen each.
The firm is “neutral” on the news as the increase in circulation revenue (as a result of the cover price hike) could be offset by the potentially lower circulation volume.
“We made no changes to our 2018/2019 financial year earnings estimates pending the upcoming result review. We maintain our target price at 35 sen, but raise rating to ‘market perform’ as per our rating definition,” said Kenanga Research.
Media Chinese International attributed the price increase to rising operating expenditure, which led the group to raise the cover price after 13 years.
“We understand the group also intends to raise the cover price of its remaining newspapers such as China Press, Guang Ming and Nanyang by 20 sen each, effective early next month.”
According to the latest data from the Malaysian Audit Bureau Circulation, Sin Chew’s physical daily newspaper circulation had continued its declining trend and recorded 310,000 in the first half of last year, compared with 324,000 in the second half of 2016 and 339,000 in the first half of 2016.
“The higher cover price could potentially cause some pricesensitive readers to shift away from the traditional platform to the digital media.
“Thus, a potential decline in Media Chinese International’s newspaper circulation volume may have a negative impact on the group’s advertisement expenditure revenue moving forward, given the advertisers’ tendency to seek higher publication media medium to publicise products.”
We understand the group also intends to raise the cover price of its remaining newspapers such as China Press, Guang Ming and Nanyang by
20 sen each. KENANGA RESEARCH
Kenanga Research said although the group’s digital newspapers’ circulation had grown to 15,200 in the first half of last year (versus an average 48,000 in 2015), it was still not enough to raise its adex revenue as the physical newspapers still commanded higher rates. Zarina Zakariah