HT&E Ltd

HT1 Details
 
HT&E Ltd (ASX: HT1; formerly known as APN News & Media Limited, APN) is a media, entertainment and technology company with diverse assets in Australia and Hong Kong, and has been gaining traction lately. The group’s revenue trends in the radio business (ARN) seem to be improving over 2017.
 
Contract for Metro Trains Melbourne:HT1 stock moved up 6.5% on November 10, 2017, while the group was lately appointed as the preferred partner on the new seven-year outdoor advertising contract for Metro Trains Melbourne (MTM). The MTM partnership is expected to commence on April 01, 2018. Further, HT&E has advised that Adshel has lost the contract for the new Yarra Trams. HT1 is disappointed with the outcome of the Yarra Trams’ negotiations. The company is looking forward to pursuing a number of compelling opportunities for Adshel. As a result, the expected net impact to EBITDA could be approximately $15m on a full year basis and the 2017 capex expectations are lowered by approximately $20m. However, the loss of Adshel’s key contract that presents some risk, is expected to be partly mitigated by the presence in Melbourne CBD through the contract with MTM. The valuation looks to be impacted disproportionately given improvement in ARN while earnings from Adshel see a downgrade on loss of a significant contract.
 
Meanwhile, HT1 stock has risen 37.74% in three months as on November 09, 2017. Given the risks, we would like to wait for more growth drivers from an investment standpoint and give an “Expensive” recommendation at the current price of $1.73

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