Name: Hum Network Ltd. (HUMNL)
Market Capitalization: PKR 11.93 Billion
Price: PKR 12.63/share (July 7, 2020)
52 Week Range: 1.71-17.70
P/E: N/A
Div. Yield: N/A
Company Profile
The company's principal business is to launch transnational satellite channels and aims at presenting a wide variety of cultural heritage. They cover a wide variety of programmes with respect to information, entertainment, news, education, health, food, music and society through a vast array of channels.
Strengths
Five year track record of increasing revenues/profits
Best in-class entertainment content creator in country with international appeal
Diverse offering of channels: recently launched Hum News
Licensing deal with Netflix, IFlix and Eros Now: could expand revenue opportunities in future over and above traditional advertising
New digital venture launched provides free optionality as valuation as of 2019 was at multi-year lows (Market capitalization of PKR 2.6 Billion). Hum Mart is an online grocery delivery platform
Advertising in TV dominates all other platforms in the country. 48% of all advertising spend is earmarked for television in Pakistan. HUM Networks is second only to ARY in capturing TV advertisement revenue
Risks
HUM revenues are highly dependent on performance of large companies and their respective advertising budgets. An ongoing recession has led to a tightening of budgets across most companies. This is reflected in HUM's lower revenues in 2019 vs 2018 along with a net loss
It appears advertising contracts with most customers tend to be short term and susceptible to the overall prospects of the economy
Stiff competition from well capitalized startups such as Airlift will cause headaches for HUM Mart.