KUALA LUMPUR – Astro Malaysia Holdings Bhd is looking forward to bringing to customers a “new Astro” that fully embraces digital convergence in the 2022 financial year.
In a note, CGS CIMB said this will help widen the company’s net of subscribers to those who have lapsed, as well as millennials, who tend to have no affinity for linear broadcasting.
“The group is said to expect another streaming partner to come on board over the next few months, and that it will launch a standalone streaming service that does not require an Astro pay-TV subscription, unlike Astro Go.
“Astro also said its broadband bundle subscription jumped by 60% quarter-on-quarter in the third quarter ended October 31, 2020, indicating that demand for content and telecommunications will be much more intertwined in the future.”
The research house maintained its “add” call on Astro, with an unchanged target price of RM1.18.
Astro’s net profit fell to RM164.53 million in the third quarter from RM170.85 million a year ago, while revenue slipped 8.9% to RM1.11 billion from RM1.22 billion over the same period.
It attributed the lower revenue to a decrease in subscription and advertising revenue due to the Covid-19 pandemic.
In a note, Public Investment Bank said Astro’s financial performance is partially cushioned by growth in the home-shopping segment, which expanded 18.9% year-on-year.
While Go Shop is benefiting from an increase in viewership and change in consumer behaviour, it said, the growth is not sufficient to cushion the risk of decline in subscription and advertising revenue in the near term.
“Nevertheless, the revival of sporting events, especially UEFA 2020 and Tokyo Olympics 2020, could potentially maintain or attract new subscribers moving forward. In addition, ongoing cost-optimisation initiatives should partially mitigate the impact on lower revenue.
“Our ‘outperform’ call and target price of RM1.38 are maintained as Astro remains an attractive dividend play.” – Bernama, December 4, 2020
