KUALA LUMPUR (Oct 30): Shares in Star Media Group Bhd rose 2.06% this morning after it was reported that real estate could now be the prized assets in Star Media, as the print media business is suffering from digital disruption that results in declining advertising revenue.

At 9.35am, Star Media rose 1.5 sen to 74.5 sen with 208,300 shares traded. The stock had earlier risen to a high of 75 sen.

The Edge Financial Daily today reported CIMB IB Research as saying Star Media's estimated market value of its real estate, including vacant land, is as much as RM519 million, or 70 sen per share — an amount that is slightly below its market capitalisation of RM539 million based on yesterday's closing of 73 sen.

The research house said the estimate value of RM519 million is based on the latest transaction records compiled by the Valuation and Property Services Department and various international third-party property valuers.

"This estimated value is over three times the properties' book values of 22 sen per share," it said.

Therefore, it believes that the stock is grossly undervalued, and upgraded the stock to an "add" rating last Friday with a higher target price of RM1.20.

CIMB IB Research stated that the potential gains on assets revaluation could raise the group's property net book value by 127%.

"Our previous estimate of a RM216.2 million (29 sen per share) revaluation gain was conservative, at best, as we assumed a 5% compound annual growth rate from the last revaluation date for each property," it said.