Atresmedia: TV ad market downside risks continue
Post the release of 1Q19 results, we update our model with marginal changes to estimates. We reiterate our NEUTRAL rating and keep our €4.7 FV unchanged. Despite the strong reaction by the shares post the numbers (+11% on the day vs IBEX +0.5%), we believe this is only to do with the fact that the shares were close to recent lows and not a structural change in the outlook. In fact the 0.9% YoY decline of the TV ad market in Q1, together with the management comment that in the first 4 months of the year (removing distortions triggered by the Easter effect) the market is down close to 5%, only reveals the weak underlying trends of the TV ad market. If anything, we see risks skewed to the downside. Additionally the updated OPEX guidance of €855m for 2019E is not materially different from the message conveyed at the FY18 results and we were already positioned slightly below this figure (€849m) since we believe more efforts will need to be made to tackle the underlying weakness of the market. Our structural concerns about the sector, laid out in our March 21st March sector report – A gloomier outlook – are reaffirmed and despite A3M’s attractive valuation vs its peers, we see these concerns as justified given the weak momentum of FTA market.Atresmedia Corporacion De Medios De Comunicacion is a television and radio broadcasting company based in Spain. Co. is engaged in the indirect management of television and radio services, which include the broadcasting, creation, production and distribution of television and radio programming, and the sale of advertising time. Group companies mainly carry on business activities relating to the production, copying and broadcasting of sounds and images, and TV and Internet home shopping. Co. provides National and World Digital Television Services. Co. is the parent company of Grupo Antena 3.
Haitong is the first international Chinese investment bank and our goal is to be the primary channel for capital flows into and out of China. During 2015 the Senior Management Team in London was expanded significantly to focus on this objective and to provide a full-service cross-asset markets business coupled with sector-focused investment banking. We work closely with our world-wide network of offices to bring a true depth of understanding to all client situations.
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