oOh!media Ltd: Is accepting a takeover bid better than waiting for a cyclical + operational turnaround?

研报英文原文证据摘录

oOh!media Ltd: Is accepting a takeover bid better than waiting for a cyclical + operational turnaround?

IdeaM

Investment thesis – Why we are Overweight

We have a fundamentally positive view of OML as a structurally sound and profitable

media business. It enjoys the structural tailwinds of OOH's rising audiences and rising

revenue share, which we forecast to continue and underpin further growth in earnings

and shareholder value.

The Australian OOH industry's continuing positive tailwinds are key. We believe OML will

continue to deliver increasing audiences to its advertisers (in contrast to most other

traditional media peers), which we expect to continue to drive increased ad rates, revenue

growth and EPS growth. Also interestingly, over the coming 12 months, we are keen to see

what further impetus the new OOH industry audience measurement platform MOVE 2.0

can deliver. We view this as one of the key debates around the stock – can MOVE 2.0 spur

incremental revenue for OML or is it maintenance opex/capex just to keep pace with

digital media peers? In our view, it's probably a bit of both. Bottom line – we keep OW

and we maintain our PT of A$1.55/share (upside ~18%).

Three key points to our thesis:

1. Structurally sound. OML enjoys positive structural tailwinds from rising OOH

audiences and also positive ad rates/pricing dynamics, helped by increasing

digitisation and improving 1st-party data available for advertisers. From our

industry discussions/channel checks, we expect OOH to continue its recent trends

of capturing a good portion of the substantial advertising revenues departing

broadcast/linear TV in Australia.

2. A classic cyclical business. As such it is tactically most likely to outperform in an

environment of rising GDP growth + lifting ad/marketing budgets.