PP 7767/09/2010(025354)

Malaysia Corporate Highlights

RHB Research
Institute Sdn Bhd
A member of the
RHB Banking Group
Company No: 233327 -M

New s Upda te
4 March 2010
MARKET DATELINE

Star Publications Share Price

Fair Value
:
:
RM3.44
RM3.60
Entering JV With Jaks Island To Develop PJ Land Recom : Market Perform
(Maintained)

Table 1 : Investment Statistics (STAR; Code: 6084) Bloomberg: STAR MK

Net Core EPS Net
FYE Turnover profit EPS EPS# Growth# PER# C.EPS* P/NTA Gearing ROE GDY
Dec (RMm) (RMm) (sen) (sen) (%) (x) (sen) (x) (x) (%) (%)
2009 974.4 144.6 19.6 19.6 -14.5 17.6 - 2.1 cash 11.7 6.7
2010f 1006.1 166.9 22.6 22.6 15.4 15.2 22.0 2.0 cash 13.1 6.1
2011f 1048.0 190.2 25.8 25.8 14.0 13.4 24.0 2.0 cash 14.4 6.5
2012f 1083.0 199.1 27.0 27.0 4.7 12.8 28.0 1.9 cash 14.4 7.2
Main Market Listing / Non-Trustee Stock / Syariah-Approved Stock By The SC # excludes EI * Consensus Based On IBES Estimates

♦ Entered into a JV with Jaks Island to develop PJ Land… Star has Issued Capital (m shares) 738.6
entered into a joint development agreement with Jaks Island Circle Sdn Market Cap (RMm) 2,540.7
Bhd (“Jaks Island”). Jaks Island is a 51%-owned subsidiary of Jaks Daily Trading Vol (m shs) 0.2
52wk Price Range (RM) 3.00-3.44
Resources Berhad, has previous experience in developing USJ Sentral that
Major Shareholders: (%)
is located in USJ’s township. The proposed agreement is to develop mixed
Huaren Holdings 41.3
residential and commercial development, which comprise three office
EPF 14.6
towers and a 15-storey residential block. The total GDV is approximately Amanah Saham B’putera 7.2
RM370m, which should be completed within 2-3 years. Star will contribute
a piece of 24,568 sq. mt. leasehold commercial land in Petaling Jaya to the FYE Dec FY10 FY11 FY12
project. The land is currently occupied with a few blocks of factory and EPS chg (%) - - -
Var to Cons (%) 2.7 7.3 (3.7)
office buildings that has been rented out to Utar Education Foundation at a
monthly rental of RM115.8k. PE Band Chart

♦ … with plans to launch a mixed residential and commercial PER = 20x

development. Under the agreement, Star is entitled to saleable office PER = 17x
PER = 14x
units with a build up of 220,000 sq. ft., which Star plans to house its three
radio stations and its new multi-media division that is currently housed in a
rented premise. All the cost and expenses are to borne entirely by Jaks
Island, which is estimated to be approximately RM280m.

♦ No significant impact to earnings. Assuming that Star rents out the

whole of the 220,000 sq. ft. at RM2.00 per sq. ft. (based on the rental rate Relative Performance To FBM KLCI
that Jaks Island is proposing to lease one of the office towers to University
Tunku Abdul Rahman) or RM5.3m p.a., Star could recognised
FBM KLCI
approximately RM3.9m in incremental annual rental income (after taking
into account rental income of RM1.4m foregone from Utar Education
Star Publications
Foundation). This RM3.9m is approximately 0.4% of FY12 revenue, is
insignificant.

♦ Risks. The risks include: 1) stronger-than-expected adex; 2) lower-than-

expected newsprint costs; and 3) an appreciating RM vs. the US$.

♦ Forecasts. We have maintained our FY10-12 earnings forecast unchanged

for now. David Chong, CFA
(603) 9280 2179
♦ Investment case. Our indicative fair value is maintained at RM3.60 based david.chong@rhb.com.my
on unchanged target FY10 PER of 16x. We reiterate our Market Perform
call on the stock.

Please read important disclosures at the end of this report.

A comprehensive range of market research reports by award-winning economists and analysts are exclusively Page 1 of 2
available for download from www.rhbinvest.com
 4 March 2010

Table 3 : Earnings Forecasts Table 4 : Forecast Assumptions

FYE Dec (RMm) FY09a FY10F FY11F FY12F FYE Dec FY10F FY11F FY12F
Turnover 974.4 1,006.1 1,048.0 1,083.0 Ad rate growth (%) 0.0 0.0 0.0
Turnover growth (%) 34.7 3.3 4.2 3.3 Ad revenue growth (%) 6.5 4.5 3.3
Circulation growth (%) 0.0 0.0 0.0
EBITDA 265.8 287.9 314.7 329.0 Avg newsprint cost (US$/mt) 650 650 650
EBITDA margin (%) 27.3 28.6 30.0 30.4
Depreciation (48.3) (45.2) (46.1) (47.0)
EBIT 217.5 242.6 268.6 282.1
EBIT margin (%) 22.3 24.1 25.6 26.0
Net Interest (15.7) 6.5 13.1 13.1
Associates (4.7) (2.6) (2.6) (2.6)
Exceptional items 0.0 0.0 0.0 0.0
Pretax Profit 197.1 246.5 279.1 292.6
Tax (47.7) (64.3) (72.6) (76.2)
Minorities (4.8) (15.3) (16.3) (17.3)
Net Profit 144.6 166.9 190.2 199.1
Core Net Profit 144.6 166.9 190.2 199.1
Source: Company data, RHBRI estimates

IMPORTANT DISCLOSURES

This report has been prepared by RHB Research Institute Sdn Bhd (RHBRI) and is for private circulation only to clients of RHBRI and RHB Investment Bank
(previously known as RHB Sakura Merchant Bankers). It is for distribution only under such circumstances as may be permitted by applicable law. The opinions and
information contained herein are based on generally available data believed to be reliable and are subject to change without notice, and may differ or be contrary to
opinions expressed by other business units within the RHB Group as a result of using different assumptions and criteria. This report is not to be construed as an
offer, invitation or solicitation to buy or sell the securities covered herein. RHBRI does not warrant the accuracy of anything stated herein in any manner whatsoever
and no reliance upon such statement by anyone shall give rise to any claim whatsoever against RHBRI. RHBRI and/or its associated persons may from time to time
have an interest in the securities mentioned by this report.

This report does not provide individually tailored investment advice. It has been prepared without regard to the individual financial circumstances and objectives of
persons who receive it. The securities discussed in this report may not be suitable for all investors. RHBRI recommends that investors independently evaluate
particular investments and strategies, and encourages investors to seek the advice of a financial adviser. The appropriateness of a particular investment or strategy
will depend on an investor’s individual circumstances and objectives. Neither RHBRI, RHB Group nor any of its affiliates, employees or agents accepts any liability for
any loss or damage arising out of the use of all or any part of this report.

RHBRI and the Connected Persons (the “RHB Group”) are engaged in securities trading, securities brokerage, banking and financing activities as well as providing
investment banking and financial advisory services. In the ordinary course of its trading, brokerage, banking and financing activities, any member of the RHB Group
may at any time hold positions, and may trade or otherwise effect transactions, for its own account or the accounts of customers, in debt or equity securities or loans
of any company that may be involved in this transaction.

“Connected Persons” means any holding company of RHBRI, the subsidiaries and subsidiary undertaking of such a holding company and the respective directors,
officers, employees and agents of each of them. Investors should assume that the “Connected Persons” are seeking or will seek investment banking or other
services from the companies in which the securities have been discussed/covered by RHBRI in this report or in RHBRI’s previous reports.

This report has been prepared by the research personnel of RHBRI. Facts and views presented in this report have not been reviewed by, and may not reflect
information known to, professionals in other business areas of the “Connected Persons,” including investment banking personnel.

The research analysts, economists or research associates principally responsible for the preparation of this research report have received compensation based upon
various factors, including quality of research, investor client feedback, stock picking, competitive factors and firm revenues.

The recommendation framework for stocks and sectors are as follows : -

Stock Ratings

Outperform = The stock return is expected to exceed the FBM KLCI benchmark by greater than five percentage points over the next 6-12 months.

Trading Buy = Short-term positive development on the stock that could lead to a re-rating in the share price and translate into an absolute return of 15% or more
over a period of three months, but fundamentals are not strong enough to warrant an Outperform call. It is generally for investors who are willing to take on higher
risks.

Market Perform = The stock return is expected to be in line with the FBM KLCI benchmark (+/- five percentage points) over the next 6-12 months.

Underperform = The stock return is expected to underperform the FBM KLCI benchmark by more than five percentage points over the next 6-12 months.

Industry/Sector Ratings

Overweight = Industry expected to outperform the FBM KLCI benchmark, weighted by market capitalisation, over the next 6-12 months.

Neutral = Industry expected to perform in line with the FBM KLCI benchmark, weighted by market capitalisation, over the next 6-12 months.

Underweight = Industry expected to underperform the FBM KLCI benchmark, weighted by market capitalisation, over the next 6-12 months.

RHBRI is a participant of the CMDF-Bursa Research Scheme and will receive compensation for the participation. Additional information on recommended securities,
subject to the duties of confidentiality, will be made available upon request.

This report may not be reproduced or redistributed, in whole or in part, without the written permission of RHBRI and RHBRI accepts no liability whatsoever for the
actions of third parties in this respect.

A comprehensive range of market research reports by award-winning economists and analysts are exclusively Page 2 of 2
available for download from www.rhbinvest.com