Astro Malaysia Holdings Berhad

$ASTRO / 6399 (ASTRO MALAYSIA HOLDINGS BERHAD)
Research by TA

$ASTRO / 6399 (ASTRO MALAYSIA HOLDINGS BERHAD)
Research by PBIV

$ASTRO / 6399 (ASTRO MALAYSIA HOLDINGS BERHAD)
Research by MAYBANK

$ASTRO / 6399 (ASTRO MALAYSIA HOLDINGS BERHAD)
Research by KENANGA

$ASTRO / 6399 (ASTRO MALAYSIA HOLDINGS BERHAD)
Research by HLIB

$ASTRO / 6399 (ASTRO MALAYSIA HOLDINGS BERHAD)
Research by Maybank

$ASTRO / 6399 (ASTRO MALAYSIA HOLDINGS BERHAD)
Research by RHB

Sharing market perspective from broker. Found it useful..

CHINA ROARING BUT MY STILL ATTRACTIVE; RINGGIT DOUBLED EDGED SWORD; FPSO STILL BRIGHT SPARK IN O&G SPACE; ASTRO TURNING AROUND?; PROFIT TAKING FLOWS...

*MY MKT:* *YES, CHINA IS EXCITING AGAIN BUT M’SIA REMAINS THE MARKET TO BE IN =)* In fact, there are many questions remain and execution is key for China esp. fiscally. The capital injections into SOE banks would help but as Michael (CH banks analyst) noted, he’s unsure which segments could *drive loan growth* as households may not be a driver unless *property transactions/consumer confidence* pick up materially. What’s more if demand’s weak, it won’t matter if corporates are given funds while banks may not dare to lend unless they’re absolved of blame for bad debts. Hence, focus on *MY domestic mkt.* though on flows, we see local insti funds are realizing profits.

Yes, ringgit’s strength is a double-edged sword ie. *good for importers but a bane for exporters.* Regardless, seasoned FMs we spoke to aren’t too worried as weaknesses seen in exporters are *short-term knee-jerk* effects. Take *VSI* for instance, stock was beaten down on weak USD as *ASP adjustments are done qtrly.* However, correction is an opportunity to collect instead as eventually, currency differences will be *passed on* while underlying demand for its clients’ *products are healthy.* *SIME’s* position is even *better.* Contrary to mkt. perception, SIME’s a *net beneficiary of RINGGIT gains* due to acquisition of *UMW.* Although *China/industrial* operations have ongoing challenges, thanks to *currency and full UMW* impact, its M’sia based *PBIT contribution will increase* from 24% in ’23 to *60% by ’25,* showing how *accretive UMW is.* Plus, *60% of component costs* are sourced abroad and currency *savings* from this alone flow *straight to EBIT.* All in, with China stimulus, SIME could win on *both* currency and China fronts.

Meanwhile, it’s *not getting better* for O&G services here till better clarity on issues like *Petros/Petronas* and of course, escalating *Mid East* conflict isn’t helping but at least, *FPSO segment* still looks lively. *MISC* looks likely to achieve *first oil for FPSO Mero-3* in the coming days and this a *huge catalyst for 4Q* earnings though this call comes with *caveat* as Petronas *will end 5 x legacy LNG* charters in 27-28 and replace them with charters for *2 x LNG from ‘27* onwards. Basically, it seems *most/all of MISC’s* maturing long term LNG charters with Petronas *will not be extended* for the long haul (20 yr) which Raymond thinks will be a *2-3% negative to earnings.* He’s not worried though as LNG charter *terminations were sort of expected* as other shipping companies can offer *better terms* to Petronas while MISC’s legacy vessels are also *not up to IMO* standards. BUT, MISC now has *orders for 10 x LNG ships* which should more than help *arrest the decline* in LNG earnings from *FY26 onwards* and yes, Mero 3 will be the *driver in FY25.*

Similarly, *YINSON’s* MQ & Atlanta FPSOs will achieve *first oil in Oct and Dec* respectively which is *music to investors’ ears* as this means cash *inflows* from charter hire. Recall, YINSON is a well-run company, in the *right space ie FPSO* and so, its management still wants to take advantage of the *growth* in this segment, but this has come at the *expense of gearing* which has ballooned. So, achieving first oil will boost both *operating cashflows and investors’ confidence* as daily charter hire is paid only when the assets are working.

Finally, *ASTRO,* yes ASTRO just had its *best quarter* in a while *(5 qtrs of decline)* on among other things, *favorable forex impact.* Out of the woods? Hard to say as *rising content costs and adex weakness* persist but encouragingly, bundling/upselling strategies have *driven ARPU* higher. All in, it requires patience when it comes to *ASTRO turnaround* as costs savings are taking *longer* to materialize but at least, the strengthening *ringgit helps* the c.35% USD-based costs, and so, *reinstatement of dividends* could be on the cards which is a rerating catalyst. Hopefully…

$VS / 6963 (V.S. INDUSTRY BERHAD) $SIME / 4197 (SIME DARBY BERHAD) $MISC / 3816 (MISC BERHAD) $YINSON / 7293 (YINSON HOLDINGS BERHAD) $ASTRO / 6399 (ASTRO MALAYSIA HOLDINGS BERHAD)

$ASTRO / 6399 (ASTRO MALAYSIA HOLDINGS BERHAD)
Research by TA Securities

$ASTRO / 6399 (ASTRO MALAYSIA HOLDINGS BERHAD)
Research by RHB

$ASTRO / 6399 (ASTRO MALAYSIA HOLDINGS BERHAD)
Research by PublicInvest

$ASTRO / 6399 (ASTRO MALAYSIA HOLDINGS BERHAD)
Research by Maybank

$ASTRO / 6399 (ASTRO MALAYSIA HOLDINGS BERHAD)
Research by HLIB

$ASTRO / 6399 (ASTRO MALAYSIA HOLDINGS BERHAD)
Research by CGSi

KUALA LUMPUR: Analysts are not anticipating a significant recovery in Astro Malaysia Holdings Bhd’s advertising expenditure (adex) in the upcoming quarters due to sluggish consumer sentiment.

© New Straits Times Press (M) Bhd

KUALA LUMPUR: Yinson Holdings Bhd, Astro Malaysia Holdings Bhd, TCS Group Holdings Bhd, Samaiden Group Bhd, Critical Holdings Bhd, Aizo Group Bhd and Kawan Food Bhd are among the stocks to watch on Tuesday.

KUALA LUMPUR: Astro Malaysia Holdings Bhd's net profit soared by 132.3 per cent to RM54.71 million in the second quarter ended July 31, 2024 (2Q 2025) from RM23.65 million a year ago. 

© New Straits Times Press (M) Bhd

PETALING JAYA: Astro Malaysia Holdings Bhd saw its net profit for its second quarter ended July 31, 2024 more than double year-on-year (y-o-y) despite a continued challenging outlook.

$ASTRO / 6399 (ASTRO MALAYSIA HOLDINGS BERHAD)
Research by HLIB
SELL – TP RM0.23

" Still a bumpy road ahead”

Astro is currently ironing out its strategy to rationalise their products offering. At this juncture, Astro have 15+ packages offering and the group observed that they are losing the opportunity for customer’s acquisition as most are left confused with options available. Moving forward, the group is looking to rejig its package offering to three different options with the lowest tier package to come on par with the most OTT offerings at RM40-50. While the simplification could increase customer’s traction, we view that this would reduce the group’s ARPU even further. Despite its expertise in local content production, we view that the outlook may still be hampered by the major hurdle of softening adex and weakening subscription. Maintain SELL with a DCF-based TP of RM0.23 (WACC: 6.7%, TG: - 2%).

Analyst:
Syifaa’ Mahsuri Ismail
syifaa@hlib.hongleong.com.my

$ASTRO / 6399 (ASTRO MALAYSIA HOLDINGS BERHAD)

$MAYBANK / 1155 (MALAYAN BANKING BERHAD) $ASTRO / 6399 (ASTRO MALAYSIA HOLDINGS BERHAD)

$ASTRO / 6399 (ASTRO MALAYSIA HOLDINGS BERHAD)

$ASTRO / 6399 (ASTRO MALAYSIA HOLDINGS BERHAD)
Research by Kenanga
Underperform – TP RM0.25

“Slapped with RM735m Extra Tax Bill"

The Inland Revenue Board (IRB) has served ASTRO with notices of additional assessment for 2019-23 totalling RM735m. ASTRO has 30 days to appeal and it will do so, and if required, initiate legal proceedings. In the worst case, this additional tax liability will push ASTRO’s negative NTA by 14 sen deeper to -27 sen (from -13 sen as at end-Apr 2024). We maintain our forecasts, TP of RM0.25 and UNDERPERFORM call.

Analyst:
Kylie Chan Sze Zan
kyliechan@kenanga.com.my

$ASTRO / 6399 (ASTRO MALAYSIA HOLDINGS BERHAD)

General Meetings: Outcome of Meeting

$ASTRO / 6399 (ASTRO MALAYSIA HOLDINGS BERHAD)

$ASTRO / 6399 (ASTRO MALAYSIA HOLDINGS BERHAD)
Research by TA
Sell – TP RM0.30

“TV Subscription Revenue Encounters Persistent Downward Pressure"

Corresponding to our earnings downgrade, our TP for Astro is lowered to RM0.30 (previously RM0.36) based on a WACC of 10.4% and LT growth rate of 0.5%. Astro remains committed to its strategic initiatives to reverse and stabilise the prolonged decline in Pay-TV subscription revenue. However, progress has been gradual, underscoring the challenging nature of the transformation efforts. Moreover, we anticipate that persistent macroeconomic challenges will hinder the near-term recovery of its crucial Pay-TV subscription and advertising revenue streams. Maintain Sell.

Analyst:
Li Hsia Wong
liwong@ta.com.my

$ASTRO / 6399 (ASTRO MALAYSIA HOLDINGS BERHAD)
Research by RHB
Neutral – TP RM0.32

“Routine Weakness"

Maintain NEUTRAL and MYR0.32 TP (DCF), 6% downside and c.3% FY25F (Jan) yield. Astro Malaysia’s weak earnings streak continued into the 1QFY25 on the back of tightened purse strings and economic headwinds. The group’s multi-year transformation journey should see the removal of legacy costs over time, in our view. We lower FY25F-27F earnings by a further 16-26% post results. At 1SD under historical EV/EBITDA mean and 56% relative share price underperformance over the past year, valuations are fair.

Analysts:
Jeffrey Tan
jeffrey.tan@rhbgroup.com
Cindy Lee
cindy.chin.hui@rhbgroup.com

$ASTRO / 6399 (ASTRO MALAYSIA HOLDINGS BERHAD)
Research by Kenanga
Underperform – TP RM0.25

“Struggling to Stay Relevant"

ASTRO’s 1QFY25 results disappointed on a combination of continued pay-TV subscriber rout, ARPU pressure, weaker adex and high operating leverage drag on YoY bottomline. We cut our FY25-26F earnings forecasts by 37% and 29%, respectively, lower our TP by 7% to RM0.25 (from RM0.27) and maintain our UNDERPERFORM call.

Analyst:
Kylie Chan Sze Zan
kyliechan@kenanga.com.my

$ASTRO / 6399 (ASTRO MALAYSIA HOLDINGS BERHAD)
Research by HLIB
Hold – TP RM0.30

“Continues to slide"

Astro chalked in soft showing with 1QFY25 core earnings of RM23.2m (-17% QoQ; -68% YoY) which came in below our (11%) and consensus (13%) expectations. The negative deviation was due to decline in advertising and subscription revenue. In view of the results shortfall, we cut our FY25/26 forecasts by -25%/-33%. Despite an uptick in ARPU YoY, number of subscribers continue to decline as the structural substitution to other OTTs persist. Additionally, the appreciation in USD continues to put a strain on its cost structure. Maintain HOLD with slightly lower DCF-based TP of RM0.30 (WACC: 6.7%, TG: -1%).

Analyst:
Syifaa’ Mahsuri Ismail
syifaa@hlib.hongleong.com.my