Nine Entertainment Co. Holdings Ltd NEC

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A$1.90 −0.04 (1.81%)

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As of Dec 1, 2023 5:10am Delayed Price Closed

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Company Report

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TV Broadcasters Double Down on Costs as Revenue Continues to Fall

Brian Han Nov 9, 2023

Advertising conditions in TV remain subdued, with September-quarter 2023 total market revenue down 8% year on year. Broadcast video on demand, or BVOD, revenue was up around 13%. But it was not enough to offset the 12% fall in metropolitan free-to-air advertising market, with regional likely not much better. Faced with this top-line headwind, TV operators are zeroing in on expenses.

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Price vs Fair Value

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NEC is trading at a 32% discount.

Price

A$1.90

Dec 1, 2023

Fair Value

A$7.80

Dec 20, 2022

Uncertainty

High

1-Star Price: A$3.69
5-Star Price: A$6.92
Economic Moat: Xdvg
Capital Allocation: Qnszlddb

Bulls Say, Bears Say

Bulls

Nine Entertainment commands a strong position in the Australian free-to-air television industry, with number-two ratings and revenue share positions.

Bears

Nine Entertainment's recent increase in ratings and revenue share has come at the expense of Ten Network. There is a risk of mean-reversion as Ten Network recovers from its current all-time low position.

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Trading Information

Previous Close Price: A$1.94
Day Range: A$1.90–1.93
52-Week Range: A$1.79–2.27
Bid/Ask: A$1.90 / A$1.94
Market Cap: A$3.09 Bil
Volume/Avg: 2.0 Mil / 3.2 Mil

Key Statistics

Price/Earnings (Normalized): 11.81
Price/Sales: 1.18
Dividend Yield: 5.79%
Dividend Yield (Forward): 5.26%
Total Yield: 10.77%

Company Profile

Nine Entertainment operates Nine Network, a free-to-air TV network across five capital cities, as well as in regional Northern New South Wales and Darwin. It also owns 9Now, a leading broadcast video on demand operation in Australia. The merger with Fairfax combines Nine's top-ranked TV network and the second-largest newspaper group, topped with a collection of quality digital assets in Nine Digital, subscription video on demand operator Stan, and Fairfax's 60%-owned Domain. It ensures the merged entity remains prominent in the eyes of audiences and advertisers.

Sector: Communication Services
Industry: Entertainment
Stock Style Box: Mid Value
Total Number of Employees: 5,254
Website: https://www.nineforbrands.com.au

Competitors

Valuation

Metric	NEC	NWS	SWM
Price/Earnings (Normalized)	11.81	43.64	2.63
Price/Book Value	1.84	1.62	1.03
Price/Sales	1.18	1.35	0.27
Price/Cash Flow	9.03	11.00	5.11

Price/Earnings

NEC

NWS

SWM

Financial Strength

Metric	NEC	NWS	SWM
Quick Ratio	0.63	1.02	0.74
Current Ratio	1.04	1.31	1.30
Interest Coverage	6.51	4.38	6.02

Quick Ratio

NEC

NWS

SWM

Profitability

Metric	NEC	NWS	SWM
Return on Assets (Normalized)	6.36%	1.98%	10.05%
Return on Equity (Normalized)	14.46%	4.13%	43.84%
Return on Invested Capital (Normalized)	11.09%	3.08%	20.93%

Return on Assets

NEC

NWS

SWM

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