PETALING JAYA: After pushing Internet service providers (ISP) to lower broadband prices last year, the Malaysian Communications and Multimedia Commission (MCMC) is said to be focused on combating content piracy this year.
According to Maybank Investment Bank (IB) Research, the regulator is in talks with ISPs to deny Internet access to Android TV boxes - a move that will ultimately benefit players such as Astro Malaysia Holdings Bhd.
“We also implore MCMC to investigate e-commerce websites that sell Android TV boxes.
“Though we prefer the banning of Android TV boxes, these two developments ought to bode well for TV subscription revenue,” the research house said in a note yesterday. Maybank IB Research noted that TV subscription revenue accounts for about 75% of Astro’s revenue. The research house noted that MCMC has been ramping up efforts to combat content piracy, with more measures to come.
Most recently, last week, two company directors were fined RM10,000 each for having 79 units of non-certified Android TV boxes.
Last month, four individuals were fined by the Sessions Court for owning and selling unauthorised TV android box and AV senders.
“Should MCMC ramp up its enforcement efforts against content piracy, causing Astro’s TV subscription revenue to stabilise or even grow, going forward, we do not discount the possibility that its valuations will re-rate as well,” it said.
In the meantime, the research house expects that Astro will be able to offer attractive dividend yields of above 6% per annum.
Based on its estimates, Astro’s dividend yields are an attractive 260 bps higher than the current Malaysian Government Securities 10-year yield of 3.6%.
The research house marginally tweaked its net profit estimates based on its forecast that Astro’s TV subscription revenue will have fallen by about 20% from a peak of RM4.4bil in FY16 to MYR3.6bil in FY21. However, it expects that the group’s core net profit will hover at about RM650mil, as it has managed to rationalise costs.
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