PETALING JAYA: Astro Malaysia Holdings Bhd
, whose results for the second quarter ended July 31 (2Q) of the financial year 2026 (FY26) underperformed analyst expectations, will continue to face headwinds from cord-cutting and over-the-top (OTT) competition.
OTT content is delivered directly to viewers via the Internet, bypassing traditional cable or satellite TV platforms.
Analysts said this trend will continue to erode Astro’s subscription revenue and average revenue per user (Arpu).
They also expect advertising expenditure (Adex) for the pay TV operator to remain muted amid soft consumer sentiment.
Astro’s core profit after tax and minority interests (Patami) for 2Q26 came in at RM1mil, which is a 43% increase quarter-on-quarter, but a 93% drop year-on-year (y-o-y).
This dragged the first half of FY26 (1H26) core Patami down to RM1.7mil, representing a 95% decline y-o-y.
Hong Leong Investment Bank (HLIB) Research said the results missed both its and consensus expectations, at only 7% and 3%, respectively, of full-year forecasts, primarily on weaker than-expected revenue and margins.
The research firm keeps its “sell” call and lowered the stock’s target price to 10 sen, from 13 sen previously.
At the time of writing, the stock was trading at 13 sen, translating to a market cap of RM655.1mil.
“The recent launch of the rebranded ‘Astro One’, offering simplified and lower-priced bundles (entertainment, sports, epic packs) starting at RM49.90, aims to enhance affordability and value perception.
“While this initiative may help support subscriber acquisition, it has also resulted in Arpu dilution, which fell to RM96.3, down RM3.50 y-o-y,” the research firm said in a note to clients.
Subscription revenue historically accounts for 62% to 77% of group revenue.
HLIB Research said the shift in pricing strategy, while tactically sound, introduces near-term pressure on top line and profitability. Despite Astro’s strong local content franchise, the research firm said Adex recovery remains soft, with customers having deferred or reallocated budgets amid weak macro conditions.
