Astro is perceived to be the biggest gainer should there be an intervention by the government on this matter, according to analysts.
KUALA LUMPUR: Kenanga Research said Astro Malaysia Holdings Bhd
's sharp share price correction so far this year could offer bargain-hunting opportunities to yield-seeking and long-term investors.
The research house maintained its outperform rating on the counter with a target price of RM2.30
Commneting on Astro's recent financial results, it said the pay TV broadcaster's 1Q19 core profit after tax after minority interests of RM179mil came in within its and consensus expectations.
"YoY, 1Q19 revenue weakened by 1%, due to the lower subscription revenue (more lower package taken up) but partially offset by higher merchandise and advertising revenue (due to CNY spending)," it said.
Kenanga said Astro recorded a total of 5.5mil customer base in 1Q19, mainly supported by its NJOI product package.
"The higher NJOI take-up rate suggested that subscribers continued to downplay their TV subscription plan, leading the group’s TV subscription revenue to record negative sequential growth for five consecutive quarters.
"The trend, however, is not expected to reverse in the near-term, in our view, judging from the change in consumer behavior."
The research house added that Astro is keeping its FY19 pay-TV subscription average revenue per user unchanged at RM101 but is set to incur a higher content cost as a result of sports events.
With regards to talk of the company being taken private, Astro has clarified that it has not received confirmation of any such privatisation proposal.
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