KUALA LUMPUR: Astro Malaysia Holdings Bhd
’s newest monetary results have come in line with RHB Research’s expectations.
“Astro Malaysia’s 3Q/9MFY22 numbers were broadly in line with our expectations but trailed consensus,” it stated.
“3QFY22 core earnings slipped 7% quarter-on-quarter (QoQ) on weaker Ebitda, partially offset by lower financing cost. 9MFY22 core earnings formed 71% of our forecast (consensus: 65%).
“An expected 1.5 sen dividend per share (DPS) puts cumulative DPS at 4.5 sen (71% payout). Cukai Makmur’s impact (partly recognised during the quarter) on its key operating subsidiary (Measat Networks Systems) was masked by tax losses at certain entities and capital allowances,” RHB stated.
While promoting expenditure (Adex) gross sales fell for the third consecutive quarter (3QFY22: -5% QoQ), a powerful restoration was seen in October, with the momentum extending into Nov/Dec 2021.
RHB famous that the launch of addressable promoting options ought to assist drive adex yields and income by way of related inventories distributed throughout its on-demand, over-the-top and linear channels.
The analysis home expects a greater 4QFY22 from the financial re-opening and rebound in promoting expenditure (adex).
It stated the addition of extra streaming companies in the medium time period ought to additional bolster Astro’s content material proposition and draw in cord-nevers.
“Astro is hopeful that the new subscription packages (unveiled on Nov 9) will drive higher ARPU. It has thus far invested RM300mil to improve customer experience via technology upgrades, with a similar amount to be expensed in 2022.
“We see good avenues for deeper household engagement via the upselling of its fiber broadband-content bundle under the wholesale pact with Telekom Malaysia,” it stated.
RHB has maintained its “buy” name on Astro with a brand new DCF goal value of RM1.30 from RM1.45.
“We lowered FY23/24F core earnings by 1-4%, mainly to factor in slower GO Shop growth and higher depreciation expense.
“Key risks are earnings miss, weaker MYR/USD and piracy. Our target price has incorporated a 4% ESG premium based on our in-house methodology,” it added.
