"Our RM1.20 target price is based on 12 times current year 2011 PE, or one-third discount to Star's 12-year average one-year forward PE. We understand that MCIL has an informal net dividend payout ratio (DPR) policy of 30-60 per cent, but for the last two years, it has exhibited 50 per cent net DPR or one-third less Star's 70-80 per cent historical net DPR.
"Even at our target price, investors can expect a decent 4 per cent net dividend yield based on 50 per cent net DPR," ECM Libra in its research report said.
MCIL is a Chinese language newspaper and magazine publisher. It has publications in Malaysia, Greater China and North America. It has several newspapers under its wings in Malaysia.
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