Existing customers don
KUALA LUMPUR: Astro Malaysia Holdings Bhd
came under slight selling pressure in morning trade following the release of its 4QFY19 earnings results yesterday.
At 9.28am, the counter was trading two sen or 1.3% lower at RM1.51 a share on the back of 284,500 units traded.
In a research note, PublicInvest research maintained outperform on Astro with an unchanged target price of RM2.
It said the group's quarterly net profit of RM118.4mil was dragged by a one-off separation scheme cost of RM58mil although it was partially mitigated by unrealised forex gain of RM17mil.
Stripping out the one-off items, the 4QFY19 net profit is estimated at RM159.4mil, which comes in within PublicInvest's and consensus expectations.
The research house said group revenue remains steady due to increased household penetration, which improved slightly to 77% from 75% a year earlier and higher contribution from e-commerce, which recorded its highest-ever quarterly revenue of RM99mil.
Adex spend is healthy with the biggest growth of 45% coming from the digital space, it added.
PublicInvest believes Astro's unique bundled broadband with content offering will increase customer engagement.
"The group will continue to strengthen its customer value proposition through initiatives such as broadband bundles, seamless viewing across all screens, better customer service and deeper engagement with fans.
"Leveraging on its content, the Group will deepen its strength in local vernacular and Asian originals through strategic partnerships to address local and regional audience," it said.
However, Affin Hwang Capital research was less optimistic on Astro, downgrading it to hold from buy given limited upside.
"Dwindling Pay-TV subscriber base continues to be a major concern, amidst the challenging content and media environment, coupled with widespread piracy issues," it said.
"In view of the challenging environment, especially with the threat of piracy, we revise downwards our FY20-21E forecasts by 7-9%."
Its target price was reduced to RM1.60 from RM1.77 previously.
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