KUALA LUMPUR, May 30 — Chinese language media platform, Media Chinese International Ltd, may reduce its workforce by as much as 44 per cent within the next two years after it integrates artificial intelligence (AI) into its operation, according to Kenanga Investment Bank (Kenanga).

In a research note, Kenanga said Media Chinese is exploring AI integration to streamline operations and hopes to monetise its intellectual property or news content in the future.

"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,” said the investment bank today.

Accordingly, Kenanga said Media Chinese is evaluating AI tools that streamline content distribution.

"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," added the note.

Media Chinese, which publishes China Press, Sin Chew Daily and Nanyang Siang Pau, is collaborating with local publishers through the Malaysian Newspapers Publishing Association to "collectively approach and engage multinational AI companies”.

Media Chinese shares have declined 3.7 per cent for this year, continuing a trend of sharp drops in recent years as the company struggled with dwindling earnings and losses.

The company reported its largest net loss since 1998, amounting to RM61 million for the financial year ended March 31, 2024.

Kenanga also said Media Chinese may reduce its workforce by up to 44% as part of its ongoing restructuring efforts.

"Media Chinese estimates that its workforce may potentially be reduced from 1,800 to around 1,000 employees in future,” it said.

Media Chinese said manpower comprises the most significant cost driver for the company, accounting for about 50 per cent of its costs, followed by newsprint at around 20 per cent.

If publishing costs increase, Kenanga said Media Chinese may close its printing plants in Johor and Penang and centralise operations at its plant in Petaling Jaya.

However, Kenanga reported Media Chinese is optimistic about improving its financial results after experiencing losses in FY23-24.

The note maintained an "underperform” call for Media Chinese with a target price of RM0.11.