A sparkling show by Astro


  • Business
  • Thursday, 25 Mar 2004

Analysis by HASNI MOHD NASIR

ASTRO All Asia Network plc's planned venture into China could serve as its launching pad to grow into a leading cross-media company in the region. 

Given such potential, investors can look forward to a more sparkling performance by the company, whose shares have not received much interest from the investing public since their listing six months ago. 

Astro's financial team began an international roadshow yesterday to promote the company to foreign investors. It will initially cover the region, before heading for other global destinations.  

The timing seems right for such an exercise, especially since the company has announced a better-than-expected after-tax profit of RM12.3mil for its financial year ended Jan 31 and a growth in subscriber number to 1.283 million. 

The company expects to perform even better in the months ahead, and has projected revenue of RM2bil in the current financial year.  

To the investing public, a company's plans and its move to promote itself to foreign investors are indicative of the direction in which it is heading.  

In Astro's case, it appears that the company is taking the cue from the government's recent moves to sell the shares it holds in some listed companies to foreign investors with the aim of improving liquidity in the stock market.  

Although not entirely owned by the government, Astro's shares are 22% held by Khazanah Nasional Bhd.  

A six-month sales moratorium on 10% of the company's shares is due to expire next month, which will make the stock more liquid and, perhaps, more exciting. 

All said, the excitement stems not purely from Astro's potential and the numbers it is expected to churn out this year, but from what it could become under its substantial owner, Ananda Krishnan, or AK. 

AK owns 42% of Astro through Usaha Tegas Sdn Bhd. And considering AK's management style, investors can look for a repeat of the kind of returns shareholders of Tanjong plc or Maxis Communications Bhd had reaped before. 

Tanjong investors have seen their investment jump at least 10-fold since the company's initial public offering in 1992, while Maxis shares have doubled in value since the telco went public in June 2002. 

But what sets Astro apart from Tanjong or Maxis, or even TELEKOM MALAYSIA BHD or Tenaga Nasional Bhd, is that its revenue potential is not only limited to Malaysia, but across the entire region covered by the footprints of Measat I and II, and soon-to-be-launched Measat III next year. 

The most prized asset in Astro's quest for China is Celestial Pictures Ltd, which it purchased for US$120mil last year.  

Celestial owns the biggest Chinese film library with over 760 titles, making it Astro's most strategic platform in China. 

Company officials said on Tuesday that negotiations with the Chinese government were proceeding smoothly and that the company's first movie launch in that country's hotels and foreign compounds is slated by the end of this quarter. 

AK had been able to achieve this without much resistance and interference from any party.  

This could be the start of a very profitable venture for Astro in China, and for its shareholders as well. 

 Stock Watch On ASTRO


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