KUALA LUMPUR: Media Chinese International Ltd may reduce its workforce to about 1,000 from 1,800 as cost saving measures.
Kenanga Research said manpower comprised the most significant cost driver for the company, accounting 50 per cent of costs, followed by newsprint at 20 per cent.
"On top of that, if unit publishing costs increase further in future, Media Chinese may shutter its printing plants in Johor and Penang. Thereafter, it would centralise print operations at its plant in Petaling Jaya, Selangor," it said in a note.
The company is also exploring ways to integrate artificial intelligence (AI) into its operations.
Hence, the firm noted that Media Chinese is evaluating AI tools that streamline content distribution. These tools enable publication of news articles on multi digital platforms within minutes in a single click.
Concurrently, these AI tools can also generate accompanying videos, and render digital human presenters to narrate news content.
"Based on the efficiency gains offered by AI, the company estimated that at least 30 per cent of its staff could be laid off within two years following the adoption of AI.
"On the back of this, Media Chinese has initiated internal training for its staff to equip them with the necessary skills to effectively utilise AI tools," it added.
The publishing company experienced significant erosion in programmatic advertising income in financial year 2034 (FY24) due to a decline in digital traffic across the group's websites.
This resulted from changes in Facebook's news feed algorithm, which led to fewer readers being directed to its sites.
"Moving forward, Media Chinese is optimistic that the worst is over in terms of financial performance. This is underpinned by cover price hikes for its key publications since Q4CY24, improved profit traction
at its travel segment, stabilised newsprint costs at US$600 per tonne reduction in depreciation and amortisation costs, increased advertisement placement for Sin Chew Jit Poh's 95th anniversary celebrations, and launch of MCIL ad manager," it said.
Kenanga Research maintained an "Underperform" call on Media Chinese with an unchanged target price of 11 sen.