KUALA LUMPUR (July 22): Star Media Group Bhd plans to roll out an e-commerce feature on its dimsum subscription video-on-demand service, starting with selling fashion and beauty products.

The selected two product categories give it a higher revenue-sharing ratio than other categories, although later on, dimsum also has plans to sell home appliances, as well as travel and holiday packages, while food and beverages could be another possibility.

The feature, which will begin a test run sometime in the third quarter of this year, however will not involve logistics and fulfillment of orders as it will merely provide a platform for the merchants.

This will minimise Star Media's outlay for this new venture, CGSCIMB Research wrote in a note this morning, adding that Star Media has been disciplined with costs despite being in the midst of building new businesses and revenue streams.

"It (Star Media) said dimsum's total subscriber base — combining both paid and non-paid groups — finally surpassed one million recently.

"This is impressive considering that the group said it spends less than RM15 million per annum on content licensing, a fraction of the cost of major streaming service players.

"The plan to have a strategic partner for dimsum is to help expand its geographical presence," the research house added.

As for its property development plans, Star Media said it plans to co-develop its crown jewel in Bayan Lepas, Penang, which will entitle it to a share of gross development value.

While plans for the development are still in the works, Star Media's estimate for the market value of its land bank is north of RM600 million.

CGSCIMB Research has reiterated its "add" call on Star Media with an unchanged target price of 95 sen, which is at a 50% discount to its revalued net asset valuation.

"We are positive on Star's future monetisation plans — although they may take time to take shape.

"Star's re-rating catalysts lie in its property development plans and expanding dimsum to more countries. Admittedly, these growth stories will take time to pan out.

"However, with the counter trading at 2 standard deviation below its 10-year mean price-to-book value, we think its current valuation is too attractive to resist. Its attractive 4.7% financial years 2019 to 2020 (FY19-20F) yield is supported by its net cash position," it added.

At 10.48 am, shares in Star Media rose 0.5 sen or 0.8% to 62.5 sen, bringing a market capitalisation of RM465.3 million.