The Group remains a primary beneficiary of structural shifts within the media landscape where OOH and DOOH segments demonstrate superior resilience.
The Visit Malaysia 2026 campaign serves as an exceptional structural catalyst for the Group with the anticipated surge in travellers driving a significant uplift in audience impressions across key urban and tourism corridors.
We have revamped our financial model and reintroduced FY26/FY27F earnings at RM12.7m/RM15.6m, representing adjustments of +10.7%/+21.7% versus our previous forecasts. We also introduce FY28F earnings at RM18.8m, representing a 3-year CAGR of 21.0%.
We maintain our BUY recommendation on SJC with an increased TP of RM0.61 (from RM0.43), based on 8.3x rolled over FY27F EPS of 7.3 sen, along with a three-star ESG rating.
Structural Demand Tailwinds Reinforcing Outdoor & DOOH Effectiveness. The Group remains a primary beneficiary of structural shifts within the media landscape where Out-of-Home (OOH) and Digital Out-of-Home (DOOH) segments demonstrate superior resilience. This momentum is underscored by a robust two-year advertising expenditure CAGR of 13.2%, which significantly outpaces the 6.6% CAGR in total wholesale and retail trade over the same period. This divergence reflects a disproportionate allocation of advertising spend toward the OOH segment, which is increasingly viewed as a critical anchor for brand safety in an evolving media landscape. Unlike the fragmented and high-risk digital landscape, OOH offers a unique institutional premium. The medium is subject to a highly regulated framework that requires rigorous content approvals from local authorities, which in turn provides a level of brand safety and credibility that is becoming increasingly scarce elsewhere.
Looking ahead, the Visit Malaysia 2026 campaign serves as an exceptional catalyst for the Group. The anticipated surge in both international and domestic traveller is expected to drive a significant uplift in audience impressions across key urban and tourism corridors. As a result, the utilization of the Group's prime assets is poised for a significant step-up. The Group is strategically positioned to capitalize on this surge through high-footfall zones such as Bukit Bintang, where the installation of a flagship 8,500 sq ft digital screen is currently underway. We forecast this asset to generate approximately RM6m in annual revenue upon commissioning, which represents a highly attractive return on a capital outlay of RM4m.
High-Quality Asset Base on Prime Corridors with Clear Revenue Visibility. Seni Jaya has successfully transitioned into Malaysia’s second-largest OOH operator by pivoting from simple site expansion to a sophisticated yield-optimization model. The Group’s 500-plus assets are increasingly weighted toward digital formats where a single gantry can host multiple advertisers simultaneously. While these digital assets require an average capital outlay of RM4m, their unit economics are vastly superior to static boards because they allow for real-time inventory rotation. This structural shift ensures that revenue per site is no longer capped by a single physical face, effectively decoupling revenue growth from physical land-bank constraints.
Operational flexibility is further supported by the Group’s agile contracting model. By utilizing campaign durations that typically range from 1 to 12 months, Management can adjust pricing in response to shifting market demand and specific client needs. This short-to-medium-term structure provides regular opportunities for yield adjustments, ensuring that the Group's rates remain aligned with current market conditions. With vehicular density in Malaysia underpinned by a 9.2% five-year CAGR in Total Industry Volume (TIV), this consistent growth in the national car fleet provides the Group with a robust physical foundation to sustain its premium pricing strategy across all high-demand corridors.
Margin Expansion Supported by Asset Mix and Structural Cost Improvements. Near-term revenue visibility is further supported by the Sungai Besi digital gantry, which is expected to add RM3m to the annual top line following its commissioning in the current financial year. These developments coincide with a robust macroeconomic backdrop characterized by a persistent return-to-office push and a tightening labour market. With the national unemployment rate recently falling to an 11-year low of 2.9%, consumer sentiment is expected to remain resilient.
We expect a significant expansion in margins driven by a shift in asset mix and improving cost efficiency. Beyond the favourable asset mix, we see additional margin upside stemming from the acquisition of Ganad Media and the elimination of revenue-sharing arrangements with Unilink Outdoor and Vision OOH. This consolidation is expected to materially reduce operating cost leakage and internalize higher proportions of revenue. Additionally, the Group is beginning to benefit from economies of scale as the expanded asset base allows fixed costs to be distributed across a larger revenue stream.
Capital Discipline and Shareholder Returns. Management earmarked RM26m for FY2026 capex to fund both the upgrading of existing sites and the development of new assets. By utilizing a five-year depreciation cycle, the Group ensures high earnings visibility and efficient capital recovery. Working capital risk appears well-contained, supported by a healthy receivables profile of approximately 40 days and a strategy of securing upfront payments from new clients. The outsourcing of construction activities to third-party contractors also provides the Group with significant execution flexibility without the burden of increased fixed costs.
As the free cash flow profile improves through the ramp-up of new high-margin assets, we expect the Group to initiate annual dividend payments starting this year. While not formally guided, we assume a payout ratio of approximately 20% of PAT, signalling our confidence in the Group's matured cash-flow profile. The commencement of dividend payments and the structural mix shift toward higher-yield DOOH formats should improve earnings quality and support a multi-year re-rating.
Outlook. Our positive outlook is underpinned by the Group's aggressive pivot toward high-margin DOOH solutions and the optimization of its asset portfolio within premium locations. The current corporate structure is highly efficient and provides a clear pathway for margin expansion through substantial operating leverage across its revenue stream. With the upcoming Visit Malaysia 2026 catalyst and a strong commissioning pipeline, we expect the Group to commence dividend payments, supported by robust free cash flow generation.
Earnings Revision. With the change in analyst, we have revamped our financial model and reintroduced FY26/FY27F earnings at RM12.7m/RM15.6m, representing adjustments of +10.7%/+21.7% versus our previous forecasts. We also introduce FY28F earnings at RM18.8m, representing a 3-year CAGR of 21.0%.
Valuation & Recommendation. We maintain our BUY recommendation on SJC with an increased TP of RM0.61 (from RM0.43), based on 8.3x rolled over FY27F EPS of 7.3 sen, along with a three-star ESG rating. The ascribed P/E multiple represents 60% discount to Bursa Malaysia Telecommunication & Media sector’s 1-year forward P/E ratio of 20.7x to reflect the Group’s smaller market capitalisation, concentrated product offerings and capital-intensive business model.
Risks. Slower-than-expected roll-out in expansion plan and weaker-than-expected occupancy rate.
Disclaimer
The report is for internal and private circulation only and shall not be reproduced either in part or otherwise without the prior written consent of Apex Securities Berhad. The opinions and information contained herein are based on available data believed to be reliable. It is not to be construed as an offer, invitation or solicitation to buy or sell the securities covered by this report.
Opinions, estimates and projections in this report constitute the current judgment of the author. They do not necessarily reflect the opinion of Apex Securities Berhad and are subject to change without notice. Apex Securities Berhad has no obligation to update, modify or amend this report or to otherwise notify a reader thereof in the event that any matter stated herein, or any opinion, projection, forecast or estimate set forth herein, changes or subsequently becomes inaccurate.
Apex Securities Berhad 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 Apex Securities Berhad. Apex Securities Berhad may from time to time have an interest in the company mentioned by this report. This report may not be reproduced, copied or circulated without the prior written approval of Apex Securities Berhad.
| Currency | Buy Rates (RM) | Sell Rates (RM) |
|---|---|---|
| USD | 3.990029 | 4.022161 |
| EUR | 4.698682 | 4.703547 |
| CNY | 0.575203 | 0.575806 |
| HKD | 0.511905 | 0.515524 |
| SGD | 3.120382 | 3.142438 |