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Published: Tuesday January 22, 2013 MYT 9:06:00 AM

Affin Research keeps Add rating on Astro, FV RM3.12

KUALA LUMPUR: Affin Investment Research is keeping its Add rating on Astro Malaysia with an unchanged discounted cashflow-derived target price of RM3.12.

It said on Tuesday while stock price has rebounded from its recent lows, we think that there is limited re-rating catalysts to take the stock to significantly higher levels as valuations have turned pricier at 30 times.

"That said, we believe the premium valuations will hold considering: 1) Astro is undergoing a transitionary earnings set back as a result of its B.yond set-top box migration; and 2) Astro will retain its dominant position in the Malaysian pay TV scene driven by its growth strategy," said the research house.

Affin Research said hence FY15 EPS was set to rebound +46% and thus easing valuation multiples.

It said from a yield angle, management has no intention to pursue a business trust. As such, although FY15 dividend yields will grow two-fold to more than 3% in tandem with the earnings recovery, yields will not be spectacular.


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