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Singapore Investment


 Can Tong add lustre to  STAR 6084 STAR MEDIA GROUP BERHAD?

Star Media Group Bhd may have been a long forgotten stock having plagued with 2 consecutive years of losses RM132 million in FY2021 and RM20 million in FY2020.

Even before the pandemic struck, the media group has been seeing declining fortunes as readership and circulation numbers fell.

But in recent months, investors have been showing interest in Star.

The counter doubled its value year-to-date, up 105% to close at 62 sen on April 26, making it one of the best performing stocks on Bursa this year.

What’s drawing most interest is news of The Edge Communications’ owner Tan Sri Tong Kooi Ong emerging as a substantial shareholder of Star.

This certainly piques interest as investors expect something brewing between the two media group.

The last time Tong made a purchase in a media-related outfit was business radio station BfM about 10 years ago where he acquired a 23% stake.

This time, it is only a 5.4% stake purchase by the tycoon in Star Media but still significant enough to draw curiosity on what’s in store for the two publications.

Still, it is doubtful if Tong’s entry, other than create a hype on, can bring much value to Star Media.

Officially, Tong said his Star stake purchase was purelye an investment decision as he finds the counter to be undervalued.

He explained that Star Media share price and capitalisation have for several years been trading well below its cash and property assets value and has no debt.

Star Media's largest shareholder is the Malaysian Chinese Association (MCA), which holds a 45.35% stake.

Interestingly, even prior to Tong’s entry, Star Media has seen some 53.3% gain since the beginning of the year until 20 April.

It looks like Tong was not the only one who found Star Media attractive due to its low valuations and turnaround in financials.

After suffering 2 years of consecutive losses, Star Media’s profits have finally rebounded to RM7 million in 2022 on the back of RM217 mil revenue.

Star Media generated operating cash flows of RM30 million in 2022 compared to a loss of RM3 million in 2021, which strips out the change in the valuations of its assets.

Shareholders will also stand to benefit from Star Media’s proposed dividend payment of one sen per share, which has a payment date of June 6.

It is certainly a relief that the counter is finally getting its due attention but how long investors will stay interested is still uncertain as it would be more reassuring if Star Media is able to solidify its financial position moving forward.



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