Asia Media Annual Report 2017

ASIA MEDIA GROUP BERHAD Annual Report 2017 11 Management Discussion and Analysis (cont’d) I. Overview and outlook of DOOH transit media industry Historically, billboards and print wraps have been the predominant form of out of home media in Malaysia as it was the easiest and most cost-efficient way of reaching out to mass audience, due to its size and location. Over the years, as technology evolved and quality of digital content improved, out of home media gradually transitioned from printed media to digital media. This is attributable to the effectiveness of digital media in engaging mass audiences due to its dynamic nature of allowing for more attractive and/or interesting contents. The DOOH transit media industry in Malaysia registered an industry size of RM 128.5 million (USD31.0 million) in 2016. The DOOH transit media industry size in Malaysia has been growing, largely owing to an increase in advertising expenditure that has resulted from Government initiatives to upgrade and rehabilitate existing public transportation infrastructure through the 10th Malaysia Plan (2011-2015) and 11th Malaysia Plan (2016-2020). In the 10th Malaysia Plan, some of the initiatives highlighted included 470 new buses for Rapid KL, Rapid Kuantan and Rapid Penang, 9 bus express transit corridors for Greater Kuala Lumpur/ Klang Valley, 35 4-car sets for Light Rail Transit (Kelana Jaya line), 38 6-car sets for Keretapi Tanah Melayu (KTM) Komuter, 12 4-car sets for Kuala Lumpur Monorail (KL Monorail), as well as establishing a command and control centre and a Performance Monitoring Hub System to monitor performance of all bus operators in Greater Kuala Lumpur/ Klang Valley. Further, the Government aims to increase public transport modal share from 17.1% in 2014 to 40% in 2020 through the 11th Malaysia Plan. Rural, rural-urban and inter-city connectivity will also be strengthened through enhanced bus, rail and air services. To increase public transport modal share by commuters, investments in new infrastructure, along with greater intermodal integration will be undertaken to ensure seamless travel. The Klang Valley Mass Rapid Transit (“KVMRT”) system will become operational during the period while construction on KVMRT Line 2 commenced in 2016 and is estimated to become operational by 2022. Additionally, construction on a Light Rail Transit (LRT) Line 3 connecting Bandar Utama to Klang, running over 36 km and serving 25 stations commenced in 2016 with expected completion in 2020. Moving forward, the DOOH transit media industry in Malaysia is projected to grow from RM128.5 million (USD31.0 million) in 2016 to reach RM 248.7 million (USD60.0 million) in 2019, at a CAGR of 34.9%. (Source: Overview and Outlook of the DOOH Transit Media Industry in Malaysia dated July 2017, Smith Zander International Sdn Bhd)