CIMB Research upbeat on Astro’s home shopping venture


  • Business
  • Wednesday, 12 Feb 2014

KUALA LUMPUR: CIM Equities Research is upbeat on Astro Malaysia Holdings’s (AMH) foray into home shopping in Malaysia following its tie-up with South Korea’s home-shopping company, GS Home Shopping Inc (GSHS).

It said on Wednesday, AMH’s unit Astro Retail Ventures Sdn Bhd (ARV) would hold a 60% stake in the JV company and GSHS the remaining 40%. AMH's initial capital investment is expected to be around RM42mil.

CIMB Research said the home-shopping business will be implemented using two dedicated channels – one each for the Malay and Chinese mediums. The first channel is expected to start operations in 2H14.

“Management believes that the home-shopping business offers a good opportunity to leverage its platform of 3.8 million pay TV subscribers,” it said.

The research house was positive on the new development as it gives AMH a potential new stream of revenue as well as exposure to the Malaysian retail market.

“Moreover, we do not expect AMH to make significant capital investments as it already has a nationwide broadcasting network. Also, AMH's existing production facilities and talents can be easily redeployed to produce home-shopping programming content.

“In term of contribution, the new segment should add another 3-4% to its FY16-17 revenue. We think that there are good growth opportunities in the segment, if AMH and GSHS can find the right formula to kick start this business in Malaysia.

“We still think that the completion of the B.yond STB swap could act as a catalyst for the stock as it will help improve AMH's margin and earnings growth from FY15 onwards. Astro remains our top pick for the media sector,” it said.

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