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HUM: King of Content

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.

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