[Shortlist] Nine Entertainment Co. Holdings Limited (NEC AU)
Last week, you highlighted a hidden asset and potential takeover in NEC. What’s your suggestion?
I suggest shortlisting NEC as a potential long.
Liquidity?
28 Aug 2026
Share price: AUD 0.97
Market capitalisation: AUD 1,537 mn (USD 1,101 mn)
Enterprise value (EV): AUD 3,115 mn (USD 2,231 mn)
Average daily volume (ADV): AUD 5 mn (USD 3 mn)
NTM P/E: 11x
What does NEC do?
NEC is Australia’s largest media group.
Source: NEC (2026)
Major assets in Broadcast TV are Channel 9 television network and 9Now streaming platform. They earn mostly advertising revenue.
Stan is Australia’s homegrown streaming service. It is the 4th largest in Australia, and growing fast.
Key assets in the Publishing segment include The Sydney Morning Herald (SMH) and The Australian Financial Review (AFR).
Publishing revenue mix has been shifting from advertising to subscription. In FY2026, 48% of Publishing revenue comes from subscription and 33% from advertising.
Streaming & Broadcast consists of Broadcast TV, Stan and 9Now.
Source: NEC (2026)
Hidden assets
The market thinks NEC is a melting ice cube. The company is trading at only 10.7x NTM P/E.
What’s your variant perception?
The challenges in the legacy TV and publishing business are obscuring NEC’s most valuable asset: Stan.
During FY2026, Stan grew revenue by 16% and EBITDA by 34% YoY. Stan started FY2027 on a positive note.1
If we apply Netflix’s (NFLX 0.00%↑ US) multiple, Stan could be worth between AUD 1,900 mn to AUD 4,100 mn:
Source: NEC, NFLX, Angsana Anderson estimates
That’s a very wide range.
I believe EBITDA is the more appropriate multiple to value Stan.
Charlie Munger said EBITDA is BS earnings.
Source: Reddit (2024)
Yes, yes, I know EBITDA is not real profit. Depreciation and amortisation are real costs.
For a quick relative valuation, EBITDA will work. NEC does not disclose Stan’s EBIT separately. I can dig deeper when I prepare the full thesis.
Ok.
As I was saying, using revenue multiple is likely not appropriate.
Netflix’s revenue is more valuable. Netflix can turn each $1 of revenue into more profits because of its global scale. It has 325 mn subscribers2 vs Stan’s 2.3 mn3.
Netflix reported ~30% EBITDA margin. Stan? Only 14%.
The same argument applies for number of subscribers too.
That’s how I arrived at AUD 1,900 mn value for Stan, using EBITDA multiple.
Looks reasonable.
When NEC acquired Stan in 2018, they estimated AUD 475 mn fair value. Stan should be worth much more now.
During FY2024 AGM, an analyst suggested Stan can be worth more than the overall valuation for NEC. Market capitalisation at that time was ~ AUD 3,500 mn.
Are you too conservative?
I am not sure how that analyst estimated Stan’s value.
At this point, AUD 1,900 mn seems the most reasonable to me. I’ll refine it further later.
In any case, this much is clear: there’s a valuable asset hidden within NEC.
The analyst also asked management whether they can unlock the value through a spin-off.
Low probability.
NEC is integrating Stan with its other broadcasting assets like Channel 9. They now share the same leadership team.
In FY2026, Stan successfully premiered MAFS: After the Dinner Party, which was a spin-off of Channel 9’s hit Married at First Sight (MAFS).4
If there’s no value unlock, I am not interested. A hidden asset that remains hidden is just a value trap.
Wait. I’m not done yet.
I suspect a takeover. NEC’s largest shareholder has been gradually increasing its economic interest and voting power.
But first, I want to talk briefly about two under-recognised growth drivers.
Under-recognised growth
First, AI licensing revenue.
John Wiley & Sons, Inc. (WLY 0.00%↑ US), a journal publisher, saw its share price rally 85% this year.
During its March 2026 earnings call, management disclosed year-to-date AI licensing revenue already surpassed the prior year's total. By year-end, WLY had earned USD 49 mn AI licensing revenue.5
Although USD 49 mn is only 3% of total revenue, it is 17% of operating profits. WLY is licensing existing content. Most of the AI licensing fee will flow down into operating profits.
NEC only began licensing its content for AI in February 2026. In August 2026, management clarified that the AI licensing revenue so far is less than AUD 25 mn (1% of revenue).
But they have a good pipeline. Management did not rule out AI licensing revenue exceeding AUD 25 mn.
For another under-recognised beneficiary of AI licensing revenue, check out Springer Nature AG & Co. KGaA (SPG GR).
SPG owns Nature, one of the top scientific journals in the world. It is bigger than WLY.
Tom Waldron, Head of Investor Relations, explained to me that SPG is taking a slower and more careful approach to AI licensing.
They want to ensure SPG retains control over proprietary data.
Second, I estimate the NBI will drive at least ~AUD 20 mn upside to revenue and operating profit.
In August 2026, Australia officially passed the News Bargaining Incentive (NBI) into law. This effectively forces social media platforms like Meta to pay Australian media outlets like NEC for their content.6
This is not something new.
Between 2021 and 2024, Meta had been paying these licensing fees. But in February 2024, it walked away.
The new law essentially compels Meta to return to paying the licensing fees.
I estimate NEC received ~ AUD 20 mn annual licensing fee from Meta under the previous agreement. Although this is less than 1% of FY2027 revenue, it will likely be ~ 7% of operating profit due to its high margins.
The upside in the first year will be even higher, because the law is backdated to 1 January 2025.
Takeover?
Why do you think a takeover is likely?
NEC’s largest shareholder has been gradually increasing its economic interest and voting power.
The WIN Group is an Australian regional media company.
It held 15% economic interest in November 2019, 18% in October 2022, and 25% in June 2024.
In February 2026, the WIN Group entered into swap transactions to increase its voting power from 20% to 23%. Its economic interest remained at 25%.
In April 2026, the WIN Group lifted its economic interest from 26% to 27%.
I suspect they may be preparing for a takeover.
Put yourself in the shoes of the largest shareholder. Why would you want to take NEC private?
Why not? The market is not fully recognising Stan’s hidden value and the group’s growth potential.
NEC looks like a bargain.
Interesting. Might be worth shortlisting for further research. What should we focus on in the full thesis?
Governance risks.
In October 2024, Intersection released an independent report on NEC. They found systemic abuse of power, bullying, discrimination and sexual harassment. They also found leaders had covered up misconduct.7
Although there have been leadership changes and it has been almost 2 years since the report, I believe it is still worthwhile to check and ensure the governance risks are acceptable.
Great. Go do that.
Coming up next
You’re an online fashion retailer. You’re running heavy losses and burning through cash. Investors won’t touch you with a ten-foot pole.
How to fix? You only need one small change to your accounting.
If you do this, you’ll show profits immediately. Free cash flow overflow. Investors will trample over one another to give you their money. Celebrity investors hail your name.
What’s that small change?
I will show you in my next post.
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Published by Andrew Wong, ACA, CFA
Disclaimer
This publication is for informational, educational, and entertainment purposes only and does not constitute financial, investment, legal, or tax advice. The content herein is a record of my personal research and investment process, and all analysis, forecasts, and opinions expressed are solely my own.
I make no representation or warranty, express or implied, as to the accuracy, completeness, or timeliness of the information provided. The stock market is highly volatile, and my forecasts, estimates, and assumptions may prove incorrect.
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At the time of publication, I do not hold any positions in NEC AU, either long or short. I may change my views, predictions, or personal portfolio positioning at any time without notice.