ntertained by gains on surge in ad income

All eyes drawn to the sector, as upbeat local consumption spurs more spending on media

All entertainment and media firms posted stronger shareholder returns last year due largely to increasing revenues from advertisers as well as improvements in the economy.

Despite war jitters over a US-led attack against Iraq, investors showed keen interest in entertainment and media entities this year. And the sector is tipped to continue to prove an attractive choice for punters.

Analysts say many of the entertainment and media firms that posted strong performances had substantial capital.

``I believe external influences such as a war in Iraq will have a marginal negative impact on the listed entertainment and media companies. Firms in the sector keep growing in line with [the] advertising industry and economy, driven by local consumption. Most importantly, they have strong fundamentals,'' Suttatip Peerasub, an analyst at Kim Eng Securities, said.

She said most had high cash flows and only a few carried debts, but even those in weak positions were showing gradual improvements.

This year is certain to bring fresh trading activity to the sector with a series of listings of the country's big entertainment companies. Firms set to bring new products to investors include RS Promotion Plc, Thailand's second-largest entertainment firm, cinema chain EGV Entertainment Plc, Matching Studio Plc, a top production house, as well as BEC Tero Entertainment Co, a subsidiary of listed parent BEC World Plc, the operator of TV Channel 3.

Last year, Major Cineplex Group Plc, the country's largest cinema chain, GMM Media Plc, a subsidiary of GMM Grammy Entertainment Plc, iTV Plc, operator of iTV news station, and Traffic Corner Holdings Plc were all listed last year, thus have no full-year reports.

All seven listed entertainment and media firms (see pages 8-9) recorded a stronger performance in total shareholder return (TSR) on one-year investments, with a sector average of 23.35% and a market capitalisation of 62.62 billion baht.

Grammy Plc, the country's largest entertainment firm capitalised at 8.95 billion baht, earned top spot for one-year and three-year TSR, registering 132.21% and 23% respectively.

Despite rampant piracy, Grammy still enjoyed solid sales of music products, its top revenue earner. The firm has also been branching out into TV and movie production. Also, losses at a wholly-owned firm in Taiwan have been significantly reduced.

Digital Onpa International (DOI), a blank tape producer with a capitalisation of 349 million baht at the end of last year, posted the worst TSRs during the one-year period at -1.17%, three years (-45.0%)and five years (-33.8%).

BEC World, the operator of Channel 3 and the largest stock in the sector with a capitalisation of 40.8 billion baht, considerably underperformed the sector average with a one-year TSR of just 2.1%, a three-year yield of -5.7% and a five-year return of 4.3%.

Chatchai Thiamtong, vice-president of BEC World, is upbeat on the year ahead with expectations of double-digit growth in advertising revenue.

Ad spending last year increased 15%, totalling 61 billion baht, according to research firm ACNielsen.

Mr Chatchai said low investment returns did not reflect a weaker performance as the TV operator had paid bigger dividends each year.

BEC World posted 2002 net profits of 1.66 billion baht, equal to 8.34 baht per share, well ahead of the year before when profits reached 1.54 billion baht or 7.71 baht per share.

The company has not yet announced a 2002 dividend, but has a dividend policy of paying at least 60% of net profits for each period.

``Low investment returns to shareholders come from the sliding price of the stocks, resulting in investors earning a lower capital gain, but dividends rise. This reflects the strong performance in the operation of the company,'' he said.

Pay-TV operator United Broadcasting Corp (UBC), capitalised at 10.74 billion baht, earned second place in one-year TSR with 94.6% despite accumulated debts os 12.8 billion baht on its books.

_ Bamrung Amnatcharoenrit

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