PETALING JAYA: Pay television (TV) operator Astro Malaysia Holdings Bhd
’s outlook will hinge on how well the company’s Astro One strategy offering simplified packages bundling popular TV channels together with streaming apps and broadband, does in luring in subscribers.
Analysts covering the stock remained cautious over its outlook, with TA Securities Research revising the stock’s target price to seven sen from 11 sen while downgrading it to a “sell” call after lowering earnings forecasts for financial year ending Jan 31, 2027 (FY27) and FY28 by 27.4% and 5.7% respectively due to higher content cost assumptions.
On Wednesday, Astro reported FY26 net profit halved to RM63.1mil compared to FY25, and lower revenue of RM2.8bil against RM3bil previously.
TA Research said a potential re-rating catalyst would be if the Astro One strategy gains meaningful traction and delivers on subscription growth.
“Astro’s pay-TV revamp under Astro One has fallen short of delivering the expected uplift in subscriptions,” it said, adding that customers have shifted to lower-priced tiers resulting in subscriber attrition and average revenue per user (Arpu) dilution leading to declining revenue.
“While management expects Arpu to stabilise, we note continued weakness in the subscriber base and adopt a more cautious stance on the outlook until clearer signs of recovery emerge,” it said.
Kenanga Research revised the stock’s target price lower to eight sen from 12.5 sen after cutting FY27 earnings by 32% to reflect higher broadband cost.
Moreover, it changed the valuation to price-to-book from discounted cash flow to reflect heightened earnings volatility and diminished cash flow predictability.
The research house has upgraded the stock to “market perform” from “underperform” as it believes value has emerged with the depressed share price already reflecting earnings risks.
“Meanwhile, a potential recovery in subscriber base offers upside,” Kenanga Research added.
The research house said while earnings headwinds remain, there were signs that both valuations and earnings may be nearing a trough, with subscriber attrition showing early signs of stabilisation.
“At the same time, potential upside could be driven by Astro’s increasing focus on expanding its intellectual property portfolio, enabling monetisation across multiple platforms (for example, linear TV, digital channels, regional syndication, and international streaming partnerships),” the research house said.
It pointed out that headwinds faced by the company’s pivot towards mass-market subscribers under the Astro One strategy include Arpu compression as subscribers move to cheaper packages.
The company also faces intense competition from streaming apps, free-to-air broadcasters for vernacular content, unauthorised TV boxes, high-cost base from legacy obligations involving long-term satellite transponder lease payments and rising competition from artificial intelligence-driven music streaming platforms offering personalised content and targeted advertising.
