Malaysia Company Guide Astro Malaysia Holdings
Version 12 | Bloomberg: ASTRO MK | Reuters: ASTR.KL Refer to important disclosures at the end of this report
DBS Group Research . Equity 18 Jul 2019
BUY Staying resilient Last Traded Price ( 17 Jul 2019): RM1.45 (KLCI : 1,657.53) Price Target 12-mth: RM2.00 (38% upside) (Prev RM2.00) Maintain BUY with unchanged RM2.00 TP. Understandably, topline growth for Astro is challenging given the structural Analyst changes in the pay-TV industry and present threat of piracy. Woo Kim TOH +60 32604 3917 [email protected] Nonetheless, we are encouraged by the cost-optimisation What’s New initiatives undertaken by Astro to sustain its earnings, while we await fresh catalysts to emerge. These include: 1) Stricter Low-value subscribers are churning out; ARPU relatively regulation and enforcement to curb online piracy; and 2) stable Attractive bundling proposition to increase the stickiness of its Piracy remains a big issue that will take time and effort subscriber base. At current price, Astro is trading at an from both Astro and MCMC to solve undemanding valuation of 11.4x FY20 EPS and offers 7% net Strategic partnership with OTT providers to drive better dividend yield. We reiterate our BUY recommendation with value and experience for subscribers unchanged RM2.00 TP. Maintain BUY with DCF-based RM2.00 TP; valuation undemanding at 11.4x FY20 EPS and 7% net yield Where we differ: Our FY20-21 earnings forecast is above consensus. We assume no subscriber growth in FY19-21 on the back of relatively flat average revenue per user (ARPU). We Price Relative expect forex tailwinds and cost savings initiatives to help RM Relative Index improve margins, especially from FY20 onwards. 214 3.0 194 174 2.5 154 134 Potential catalysts. We believe a turnaround in consumer 2.0 114 94 sentiment will be positive for the company, as it could drive pay- 1.5 74 54 1.0 34 TV subscriber growth and positive ARPU trend. Stricter Jul-15 Jul-16 Jul-17 Jul-18 Jul-19
Astro Malaysia Holdings (LHS) Relative KLCI (RHS) regulation to curb online piracy would also help to drive consumers back to the legal market. Forecasts and Valuation FY Jan (RMm) 2019A 2020F 2021F 2022F Revenue 5,479 5,441 5,541 5,665 Valuation: EBITDA 1,650 1,669 1,693 1,762 Our RM2.00 TP is based on DCF valuation – assuming 8.9% Pre-tax Profit 651 879 959 1,081 WACC and 1.0% terminal growth. This implies 15.7x FY20 PE. Net Profit 463 664 724 805 Net Pft (Pre Ex.) 575 664 724 805 Net Pft Gth (Pre-ex) (%) (15.3) 15.6 9.1 11.2 Key Risks to Our View: EPS (sen) 8.88 12.7 13.9 15.5 Weak consumer sentiment. Weaker consumer spending may EPS Pre Ex. (sen) 11.0 12.7 13.9 15.5 also compel consumers to subscribe to cheaper packages, EPS Gth Pre Ex (%) (15) 16 9 11 and/or lead to a higher churn rate. Diluted EPS (sen) 11.0 12.7 13.9 15.5 Net DPS (sen) 9.00 10.0 11.0 12.0 BV Per Share (sen) 11.2 14.0 16.9 20.3 At A Glance PE (X) 16.3 11.4 10.4 9.4 Issued Capital (m shrs) 5,214 PE Pre Ex. (X) 13.2 11.4 10.4 9.4 Mkt. Cap (RMm/US$m) 7,561 / 1,837 P/Cash Flow (X) 4.0 5.9 5.1 6.0 Major Shareholders (%) EV/EBITDA (X) 6.4 6.1 5.8 5.5 Khazanah Nasional Bhd 20.7 Net Div Yield (%) 6.2 6.9 7.6 8.3 Usaha Tegas Group 41.0 P/Book Value (X) 12.9 10.4 8.6 7.1 T. Rowe 5.1 Net Debt/Equity (X) 4.2 3.1 2.2 1.7 ROAE (%) 74.7 101.1 90.1 83.1 Free Float (%) 36.8 3m Avg. Daily Val (US$m) 0.67 Earnings Rev (%): 0 0 0 Consensus EPS (sen): 12.2 12.4 11.5 ICB Industry : Consumer Services / Media Other Broker Recs: B: 11 S: 1 H: 5 Source of all data on this page: Company, AllianceDBS, Bloomberg Finance L.P
ed: CK/ sa: WMT, PY, CS Company Guide
Astro Malaysia Holdings
WHAT’S NEW Staying resilient in a challenging market
Managing its subscriber base. Amid relatively weak Legal SVOD penetration per capita, 2018 consumer sentiment in Malaysia, we estimate Astro has been 45% experiencing pay-TV subscriber loss in six out of the previous 40% 40% 38% eight quarters. Astro alluded that it is trying to manage its 35% subscriber base, and we note that the company seems to be 30% 30% 24% more willing to let go of low-value customers and shift them 25% to its freemium service, i.e. Njoi. This is reflected in the pay-TV 20% 14% ARPU trend, which has remained very stable at about 15% 13% 12% RM100/month over the last three years, despite the weak 10% 8% 7% 4% 4% subscriber trend. 5% 2% 1% 1% 0% Estimated Astro pay-TV subs and ARPU
Pay-TV subs (LHS) ARPU (RHS) 3,600 102 Sources: Asia Video Industry Report 2019 100 3,400 MCMC to play a more active role. Astro is working closely 98 3,200 with MCMC to curb online piracy, including exploring 96 regulatory measures such as a ban on ISDs. At the moment, 3,000 we observe that MCMC has stepped up its enforcement 94 against distributors and sellers caught with ISDs. Other 2,800 92 potential measures in the future could include dynamic
2,600 90 blocking of illegal streaming websites – in layman terms, Internet Service Providers (ISPs) will have to also block other websites that point users to copyright-infringing websites. This measure is to target a common method employed by piracy Sources: Company, AllianceDBS estimate Note: Astro stopped providing pay-TV subscriber figure since 2QFY18 websites where they use alternative Web addresses to avoid the access to their content being blocked. Piracy is a bigger issue. Although the decline in Astro’s pay- TV subs can be partly attributed to the rising popularity of We believe curbing online piracy would help to drive Subscription Video-on-Demand (SVOD) Over-the-Top (OTT) consumers back to the legal market (whether pay-TV or OTT), services such as Netflix and iFlix in recent years, the fact although it hard to quantify the impact for now. At the very remains that take-up rate of these services are still very low in least, it should discourage or make it very cumbersome for the Malaysia. According to the Asia Video Industry Association average consumers to access pirated content. (AVIA) Report 2019, legal SVOD OTT penetration in Malaysia is Strategic partnership with OTT. Astro has recently entered estimated to be at only 4%, compared to 30-40% for into a strategic partnership with iQIYI, a leading SVOD service developed economies in the Asia Pacific region (see chart from China, in June. This gives Astro exclusive rights to deliver below). iQIYI content on TV, On Demand and OTT in Malaysia. We believe the bigger issue here is about piracy. Based on a Similarly, Astro also managed to negotiate for OTT rights from survey commissioned by AVIA’s Coalition Against Piracy, it is HBO at no extra cost, which will give its Movie Pack customers found that 25% of Malaysian consumers use a TV box to access to HBO GO contents going forward. stream pirated TV and video content. And, of the 25% of We expect Astro to continue to explore such deals with OTT Malaysian consumers who purchase illicit streaming device providers whenever possible, in addition to growing and (ISD), three in five respondents stated that they cancelled all or enhancing its own OTT app, Astro GO. Such measures are some of their subscription to legal pay-TV services. necessary to align with changing consumers’ viewing habit (basically anytime, anywhere), helping Astro to defend its APRU and stem cord-cutting by its subscribers in the longer term. Upcoming initiatives in 2HCY19. Astro is in the midst of making enhancement across its Astro and Astro GO services in order to provide a seamless and unified user interface experience. Besides that, the company is also planning to
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Astro Malaysia Holdings introduce 4K Ultra HD services to its subscribers, hopefully assuming minimal subscriber net addition (0-1% annually), before year end. flattish ARPU, and Astro’s pay-TV household penetration rate to decline to 40% in the long term (from c.45% currently), We understand Astro is also interested in offering bundled which we deem reasonable. We forecast EBITDA margins to products, combining its pay-TV services with broadband plans stay within 30-31%, which is at the lower range of from other service providers. Multiple negotiations are still on- management guidance of 30-35%. going, which we believe are with existing partners such as Maxis and TIME. Maintain BUY with unchanged DCF-based TP of RM2.00. Our DCF-based TP for Astro remains unchanged at RM2.00
(WACC 8.9%, TG 1.0%), implying an undemanding valuation Valuation and recommendation of 15.7x FY20 PE. Based on the current price, the stock offers
a very attractive net yield of 7% (based on its minimum payout Earnings underpinned by cost optimisation initiatives. policy of 75%). Without a doubt, topline growth for Astro is a challenging task given the on-going structural changes in the pay-TV industry and present threat of piracy. Nonetheless, we are encouraged by the cost-optimisation initiatives undertaken by Astro to sustain its earnings, while we await fresh catalysts to emerge for the stock. These include: 1) Stricter regulation and enforcement to curb online piracy; and 2) Attractive bundling proposition to increase the stickiness of its subscriber base.
Key assumptions to our model. We made no changes to our FY20-22F earnings forecast. In our model, we are still
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Company Guide
Astro Malaysia Holdings
CRITICAL DATA POINTS TO WATCH Revenue breakdown (in RM m)
TV subscription TV adex Radio Merchandising Other Dominant pay-TV operator in Malaysia. As at July 2018, we 6,000 estimate that Astro had a residential pay-TV subscriber base of 3.26m, roughly translating to a penetration rate of about 44% of 5,000
Malaysian households. There should also be about 2.4m subscribers 4,000 for its free-to-air (FTA) satellite TV service, Njoi. Besides growing its pay-TV services, Astro has also been seeking new growth areas 3,000 within its businesses, such as TV advertising, home shopping and 2,000 content sales, over the past few years. 1,000
Challenge in growing pay-TV subs base. We believe that Astro’s - FY14 FY15 FY16 FY17 FY18 FY19 FY20F FY21F pay-TV subscriber growth has been slowing down in recent years due to rising cost of living (which impacted discretionary spending) Pay-TV subscribers (‘000) and ARPU and the emergence of over-the-top (OTT) alternatives. As such, we expect pay-TV subscriber growth for Astro to remain flattish, HD + IPTV Non-HD Blended ARPU 4,000 101.5 102.0 lagging behind the household formation rate of 2-3% p.a. going 100.7 3,500 100.4 101.0 forward, with the penetration rate remaining stable at 41-44%. 99.9 99.9 99.3 100.0 3,000 98.9 99.0 Astro is likely to add more subscribers to its Njoi platform. This 2,500 98.0 should help maintain viewership and drive advertising revenue, 2,000 96.0 97.0 although monetisation through prepaid channels is generally still 1,500 96.0 very low. 1,000 95.0
500 94.0 Slowing ARPU. ARPU had been on the rise in FY12-17, largely - 93.0 driven by the increase in take-up rate of high definition (HD) FY14 FY15 FY16 FY17 FY18 FY19 FY20F FY21F services when Astro aggressively swapped out set-top boxes (STBs) and launched more HD channels. However, given the poor TV adex and y-o-y growth (%) 450 20.0% consumer sentiment, ARPU growth slowed down significantly in 400 recent quarters as subscribers cut back on their spending by 16.1% 15.0% downgrading to cheaper packages. We believe overall ARPU 350 growth will be quite muted in the near term, save the occasional 300 12.2% 10.0% price hikes by Astro to mitigate higher content cost. 250
200 5.9% 5.7% 5.0% Growing advertising revenue. Due to Astro’s wider mass-market 150 4.0% 4.0% reach with the introduction of Njoi and advertisers adopting a more 100 0.0% targeted approach, Astro managed to grow its TV adex by 9-16% -1.3% 50 -2.2% in FY12-14 and grabbed market share from Media Prima. TV adex 0 -5.0% dipped 2% in FY15 due to poor consumer sentiment, before FY14 FY15 FY16 FY17 FY18 FY19 FY20F FY21F recovering by 6-12% in FY16-17. We expect growth to be modest at 4% in FY20-21F. Radio adex and y-o-y growth (%) 350 25.0% Radio is generally more resilient as it typically benefits from 300 19.8% 20.0% downtrading by advertisers during tough times. We assume Astro’s 14.9% 15.0% 250 adex growth of 4% p.a. in FY19-20F, regaining some market share 10.8% 10.0% and expect contribution from two new radio stations launched 200 recently. 4.0% 4.0%5.0% 150 0.0% 0.0% -1.4% 100 -5.0%
50 -9.5% -10.0%
0 -15.0% FY14 FY15 FY16 FY17 FY18 FY19 FY20F FY21F
Source: Company, AllianceDBS
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Company Guide
Astro Malaysia Holdings
Appendix 1: A look at Astro's listed history – what drives its share price?
Astro share price vs Consumer Sentiment Index Remarks The demand for Astro’s pay-TV 4.00 Astro share price Consumer Sentiment Index 140 services is influenced by consumer
130 discretionary spending, which is 3.50 represented by the Consumer 120 Sentiment Index.
3.00 110 It shapes investor expectations for 100 subscriber base and ARPU trend. 2.50 90
2.00 80
70 1.50 60
1.00 50 2013 2014 2015 2016 2017 2018 2019
Sources: AllianceDBS Research, Bloomberg Finance L.P, MIER
Astro share price vs no. of subscribers (in ‘000) Remarks When Astro Malaysia was enjoying 4.00 Astro share price Pay-TV subscriber ('000) 3,700 subscriber gain and uptrend in ARPU, there is a positive effect on share 3.50 3,500 price.
Share price performance is lacklustre 3.00 3,300 given its subscriber loss and anaemic ARPU. 2.50 3,100
2.00 2,900
1.50 2,700
1.00 2,500 2013 2014 2015 2016 2017 2018 2019
Sources: AllianceDBS Research, Bloomberg Finance L.P
Astro share price vs. monthly ARPU Remarks Astro is considered a dominant player 4.00 Astro share price ARPU (in RM) 102 in the pay-TV market in Malaysia and naturally has the ability to raise prices. 3.50 100 Any uptrend in ARPU needs to be
3.00 accompanied by positive subscriber 98 gain in order to drive the share price.
2.50 96 2.00
94 1.50
1.00 92 2013 2014 2015 2016 2017 2018 2019
Sources: AllianceDBS Research, Bloomberg Finance L.P
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Company Guide
Astro Malaysia Holdings
Leverage & Asset Turnover (x) 6.00 1.0 1.0 Balance Sheet: 5.00 1.0 0.9 Still comfortable gearing position. As at Apr 2019, the gearing 4.00 0.9 level for Astro remained decent at 1.8x net debt-to-EBITDA. 3.00 0.9 More importantly, all of its USD term loans and USD-based 0.9 2.00 finance leases have been fully hedged or redenominated into 0.9 0.8 1.00 Ringgit since 2013. Currently, Astro's only balance sheet 0.8 exposure to USD fluctuation is its finance lease liabilities and 0.00 0.8 2018A 2019A 2020F 2021F 2022F vendor financing for its set-top boxes Gross Debt to Equity (LHS) Asset Turnover (RHS)
Capex. Capex was high in previous years mainly due to the Capital Expenditure RM m aggressive swap-out of STBs by Astro. STBs are owned by Astro 700.0 and conservatively amortised over three years. Astro also had 600.0 some major non-cash capex recently – i.e. finance leases for 500.0 new satellite transponder capacity to expand its HD channels. 400.0 300.0 Share Price Drivers: 200.0 Turnaround in consumer sentiment. As reflected in its share 100.0 0.0 price, Astro's subscription based revenue has been more 2018A 2019A 2020F 2021F 2022F resilient in the current weak environment compared to other Capital Expenditure (-) media companies that rely on advertising. Nevertheless, we ROE (%) believe a turnaround in consumer sentiment will still be positive 120.0% for the company, as it could alleviate concerns over subscriber trends and flattish ARPU growth. 100.0% 80.0%
Key Risks: 60.0% Weak consumer sentiment. Weaker consumer spending could also compel consumers to subscribe to cheaper packages, 40.0% and/or lead to a higher churn rate. 20.0%
0.0% 2018A 2019A 2020F 2021F 2022F Company Background Astro Malaysia is the dominant pay-TV operator in Malaysia Forward PE Band (x) with more than 80% market share. (x)
+2sd: 28.5x 28.0
23.0 +1sd: 23.8x
Avg: 19.1x 18.0
-1sd: 14.3x 13.0
-2sd: 9.6x 8.0 Jul-15 Jul-16 Jul-17 Jul-18 Jul-19
PB Band (x) (x)
28.7 +2sd: 29.41x
+1sd: 24.58x 23.7
Avg: 19.76x 18.7
-1sd: 14.93x 13.7
-2sd: 10.1x 8.7 Jul-15 Jul-16 Jul-17 Jul-18 Jul-19
Source: Company, AllianceDBS
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Company Guide
Astro Malaysia Holdings
Key Assumptions FY Jan 2018A 2019A 2020F 2021F 2022F
Pay-TV subscribers ('000) 3,288 3,106 3,106 3,106 3,137 Blended ARPU 99.9 99.9 101 101 102 (RM/month) TV adex growth (%) 5.92 (1.3) 4.00 4.00 4.00 Radio adex growth (%) (1.4) (9.5) 4.00 4.00 3.00
Income Statement (RMm) FY Jan 2018A 2019A 2020F 2021F 2022F
Revenue 5,531 5,479 5,441 5,541 5,665 Cost of Goods Sold (3,270) (3,534) (3,339) (3,361) (3,350) Gross Profit 2,261 1,945 2,101 2,180 2,315 Other Opng (Exp)/Inc (1,214) (902) (1,018) (1,037) (1,062) Operating Profit 1,047 1,043 1,084 1,143 1,253 Other Non Opg (Exp)/Inc 0.0 0.0 0.0 0.0 0.0 Associates & JV Inc (1.6) (1.3) 0.0 0.0 0.0 Net Interest (Exp)/Inc (65.2) (279) (205) (184) (172) Exceptional Gain/(Loss) 92.7 (112) 0.0 0.0 0.0 Pre-tax Profit 1,073 651 879 959 1,081 Tax (309) (190) (220) (240) (270) Minority Interest 6.70 2.10 5.00 5.00 (5.0) Preference Dividend 0.0 0.0 0.0 0.0 0.0 Net Profit 771 463 664 724 805 Net Profit before Except. 678 575 664 724 805 EBITDA 1,503 1,650 1,669 1,693 1,762 Growth Revenue Gth (%) (1.5) (0.9) (0.7) 1.8 2.2 EBITDA Gth (%) (6.6) 9.8 1.1 1.5 4.1 Opg Profit Gth (%) (8.8) (0.4) 3.9 5.5 9.6 Net Profit Gth (Pre-ex) (%) 0.2 (15.3) 15.6 9.1 11.2 Margins & Ratio Gross Margins (%) 40.9 35.5 38.6 39.3 40.9 Opg Profit Margin (%) 18.9 19.0 19.9 20.6 22.1 Net Profit Margin (%) 13.9 8.4 12.2 13.1 14.2 ROAE (%) 120.7 74.7 101.1 90.1 83.1 ROA (%) 11.8 7.1 10.7 11.7 13.2 ROCE (%) 15.4 15.0 17.1 18.0 19.6 Div Payout Ratio (%) 84.5 101.3 78.5 79.2 77.6 Net Interest Cover (x) 16.1 3.7 5.3 6.2 7.3 Source: Company, AllianceDBS
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Company Guide
Astro Malaysia Holdings
Quarterly / Interim Income Statement (RMm) FY Jan 1Q2019 2Q2019 3Q2019 4Q2019 1Q2020
Revenue 1,311 1,417 1,384 1,368 1,234 Cost of Goods Sold (766) (1,045) (854) (870) (729) Gross Profit 545 371 530 498 505 Other Oper. (Exp)/Inc (249) (247) (223) (295) (221) Operating Profit 296 125 308 203 285 Other Non Opg (Exp)/Inc (0.7) 37.8 34.3 38.9 8.10 Associates & JV Inc 0.0 0.0 0.0 0.0 0.0 Net Interest (Exp)/Inc (61.8) (95.9) (91.7) (29.9) (58.2) Exceptional Gain/(Loss) 1.20 (37.4) (34.6) (40.8) (8.0) Pre-tax Profit 235 29.2 216 171 227 Tax (61.0) (14.5) (62.1) (52.7) (57.2) Minority Interest 0.80 1.90 (0.4) (0.2) 6.90 Net Profit 175 16.6 153 118 176 Net profit bef Except. 174 54.0 188 159 184 EBITDA 555 427 599 510 533
Growth Revenue Gth (%) (5.6) 8.1 (2.3) (1.1) (9.8) EBITDA Gth (%) 31.1 (23.2) 40.5 (15.0) 4.5 Opg Profit Gth (%) 40.6 (57.9) 146.8 (34.0) 40.1 Net Profit Gth (Pre-ex) (%) 54.9 (68.9) 247.8 (15.2) 15.7 Margins Gross Margins (%) 41.6 26.2 38.3 36.4 40.9 Opg Profit Margins (%) 22.6 8.8 22.2 14.8 23.1 Net Profit Margins (%) 13.3 1.2 11.1 8.7 14.3
Balance Sheet (RMm) FY Jan 2018A 2019A 2020F 2021F 2022F
Net Fixed Assets 2,401 2,233 1,945 1,684 1,462 Invts in Associates & JVs 2.70 2.20 2.20 2.20 2.20 Other LT Assets 2,403 2,483 2,366 2,356 2,349 Cash & ST Invts 1,008 697 918 1,209 1,208 Inventory 19.7 16.3 18.1 18.5 18.9 Debtors 1,012 818 907 924 944 Other Current Assets 2.20 10.2 10.2 10.2 10.2 Total Assets 6,848 6,260 6,166 6,204 5,994
ST Debt 646 475 475 475 475 Creditor 1,653 1,467 1,360 1,385 1,133 Other Current Liab 105 38.2 38.2 38.2 38.2 LT Debt 3,319 3,096 2,971 2,838 2,695 Other LT Liabilities 472 505 505 505 505 Shareholder’s Equity 654 585 728 879 1,059 Minority Interests (0.3) 93.6 88.6 83.6 88.6 Total Cap. & Liab. 6,848 6,260 6,166 6,204 5,994
Non-Cash Wkg. Capital (725) (660) (463) (471) (198) Net Cash/(Debt) (2,958) (2,874) (2,528) (2,104) (1,963) Debtors Turn (avg days) 61.7 60.9 57.9 60.3 60.2 Creditors Turn (avg days) 212.8 194.6 187.3 178.3 161.8 Inventory Turn (avg days) 2.6 2.2 2.3 2.4 2.4 Asset Turnover (x) 0.8 0.8 0.9 0.9 0.9 Current Ratio (x) 0.8 0.8 1.0 1.1 1.3 Quick Ratio (x) 0.8 0.8 1.0 1.1 1.3 Net Debt/Equity (X) 4.5 4.2 3.1 2.2 1.7 Net Debt/Equity ex MI (X) 4.5 4.9 3.5 2.4 1.9 Capex to Debt (%) 16.5 17.0 7.8 8.5 8.8 Z-Score (X) 1.0 1.1 1.3 1.3 1.3
Source: Company, AllianceDBS
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Company Guide
Astro Malaysia Holdings
Cash Flow Statement (RMm) FY Jan 2018A 2019A 2020F 2021F 2022F
Pre-Tax Profit 1,073 651 879 959 1,081 Dep. & Amort. 457 608 585 550 509 Tax Paid (268) (222) (220) (240) (270) Assoc. & JV Inc/(loss) 0.0 0.0 0.0 0.0 0.0 Chg in Wkg.Cap. (28.8) 53.7 (524) (323) (611) Other Operating CF 782 808 558 550 544 Net Operating CF 2,016 1,899 1,278 1,496 1,253 Capital Exp.(net) (653) (607) (270) (280) (280) Other Invts.(net) (443) 407 0.0 0.0 0.0 Invts in Assoc. & JV 0.0 0.0 0.0 0.0 0.0 Div from Assoc & JV 0.0 0.0 0.0 0.0 0.0 Other Investing CF 118 (43.8) 0.0 0.0 0.0 Net Investing CF (977) (244) (270) (280) (280) Div Paid (651) (574) (521) (573) (625) Chg in Gross Debt (57.1) (618) (125) (133) (142) Capital Issues 0.0 0.0 0.0 0.0 0.0 Other Financing CF (369) (448) (231) (218) (206) Net Financing CF (1,078) (1,639) (877) (925) (974) Currency Adjustments 9.40 (9.6) 0.0 0.0 0.0 Assuming about 75- Chg in Cash (29.7) 6.90 131 291 (1.3) 80% dividend payout Opg CFPS (sen) 39.2 35.4 34.6 34.9 35.8 Free CFPS (sen) 26.2 24.8 19.3 23.3 18.7 Source: Company, AllianceDBS
Target Price & Ratings History
2.05 RM 12-mth 1.95 Date of Closing S.No. T arget Rating Report Price 1.85 Price 1: 01 Aug 18 1.82 2.25 BUY 1.75 1 2: 27 Sep 18 1.52 2.10 BUY 1.65 3: 06 Dec 18 1.38 2.10 BUY 2 1.55 4 4: 27 Mar 19 1.49 2.00 BUY 5: 26 Jun 19 1.48 2.00 BUY 1.45 5 1.35 3 1.25
1.15
1.05 Jul-18 Sep-18 Nov-18 Jan-19 Mar-19 May-19 Jul-19
Note : Share price and Target price are adjusted for corporate actions.
Source: AllianceDBS Analyst: Woo Kim TOH
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Company Guide
Astro Malaysia Holdings
^ Bloomberg ESG Disclosure Scores rate companies annually based on their disclosure of quantitative and policy-related ESG data. It is based on a scoring scale of 0-100, and calculated using a subset of more than 100 raw data points it collects on ESG. It is designed to measure the robustness of companies' disclosure of ESG information in their reporting/the public domain. Based on Bloomberg disclosures, as of 25 Jan 2019, the global ESG disclosure average score is 24.92 and 22.14, 28.26, 49.97 for Environmental, Social and Governance, respectively.
AllianceDBS recommendations are based on an Absolute Total Return* Rating system, defined as follows: STRONG BUY (>20% total return over the next 3 months, with identifiable share price catalysts within this time frame) BUY (>15% total return over the next 12 months for small caps, >10% for large caps) HOLD (-10% to +15% total return over the next 12 months for small caps, -10% to +10% for large caps) FULLY VALUED (negative total return, i.e., > -10% over the next 12 months) SELL (negative total return of > -20% over the next 3 months, with identifiable share price catalysts within this time frame) *Share price appreciation + dividends
Completed Date: 18 Jul 2019 08:10:47 (MYT) Dissemination Date: 18 Jul 2019 08:39:45 (MYT)
Sources for all charts and tables are AllianceDBS unless otherwise specified.
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(a) such valuations, opinions, estimates, forecasts, ratings or risk assessments or their underlying assumptions will be achieved, and (b) there is any assurance that future results or events will be consistent with any such valuations, opinions, estimates, forecasts, ratings or risk assessments stated therein.
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Astro Malaysia Holdings
Please contact the primary analyst for valuation methodologies and assumptions associated with the covered companies or price targets. Any assumptions made in this report that refers to commodities, are for the purposes of making forecasts for the company (or companies) mentioned herein. They are not to be construed as recommendations to trade in the physical commodity or in the futures contract relating to the commodity referred to in this report.
DBSVUSA, a US-registered broker-dealer, does not have its own investment banking or research department, has not participated in any public offering of securities as a manager or co-manager or in any other investment banking transaction in the past twelve months and does not engage in market-making.
ANALYST CERTIFICATION The research analyst(s) primarily responsible for the content of this research report, in part or in whole, certifies that the views about the companies and their securities expressed in this report accurately reflect his/her personal views. The analyst(s) also certifies that no part of his/her compensation was, is, or will be, directly or indirectly, related to specific recommendations or views expressed in the report. The research analyst (s) primarily responsible for the content of this research report, in part or in whole, certifies that he or his associate1 does not serve as an officer of the issuer or the new listing applicant (which includes in the case of a real estate investment trust, an officer of the management company of the real estate investment trust; and in the case of any other entity, an officer or its equivalent counterparty of the entity who is responsible for the management of the issuer or the new listing applicant) and the research analyst(s) primarily responsible for the content of this research report or 2 his associate does not have financial interests in relation to an issuer or a new listing applicant that the analyst reviews. DBS Group has procedures in place to eliminate, avoid and manage any potential conflicts of interests that may arise in connection with the production of research reports. The research analyst(s) responsible for this report operates as part of a separate and independent team to the investment banking function of the DBS Group and procedures are in place to ensure that confidential information held by either the research or investment banking function is handled appropriately. There is no direct link of DBS Group's compensation to any specific investment banking function of the DBS Group.
COMPANY-SPECIFIC / REGULATORY DISCLOSURES 1. DBS Bank Ltd, DBS HK, DBS Vickers Securities (Singapore) Pte Ltd (''DBSVS'') or their subsidiaries and/or other affiliates do not have a proprietary position in the securities recommended in this report as of 30 Jun 2019 2. Neither DBS Bank Ltd nor DBS HK market makes in equity securities of the issuer(s) or company(ies) mentioned in this Research Report.
Compensation for investment banking services: 3. DBSVUSA does not have its own investment banking or research department, nor has it participated in any public offering of securities as a manager or co-manager or in any other investment banking transaction in the past twelve months. Any US persons wishing to obtain further information, including any clarification on disclosures in this disclaimer, or to effect a transaction in any security discussed in this document should contact DBSVUSA exclusively.
Disclosure of previous investment recommendation produced: 4. DBS Bank Ltd, DBS Vickers Securities (Singapore) Pte Ltd (''DBSVS''), their subsidiaries and/or other affiliates may have published other investment recommendations in respect of the same securities / instruments recommended in this research report during the preceding 12 months. Please contact the primary analyst listed in the first page of this report to view previous investment recommendations published by DBS Bank Ltd, DBS Vickers Securities (Singapore) Pte Ltd (''DBSVS''), their subsidiaries and/or other affiliates in the preceding 12 months.
1 An associate is defined as (i) the spouse, or any minor child (natural or adopted) or minor step-child, of the analyst; (ii) the trustee of a trust of which the analyst, his spouse, minor child (natural or adopted) or minor step-child, is a beneficiary or discretionary object; or (iii) another person accustomed or obliged to act in accordance with the directions or instructions of the analyst. 2 Financial interest is defined as interests that are commonly known financial interest, such as investment in the securities in respect of an issuer or a new listing applicant, or financial accommodation arrangement between the issuer or the new listing applicant and the firm or analysis. This term does not include commercial lending conducted at arm's length, or investments in any collective investment scheme other than an issuer or new listing applicant notwithstanding the fact that the scheme has investments in securities in respect of an issuer or a new listing applicant.
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Company Guide
Astro Malaysia Holdings
RESTRICTIONS ON DISTRIBUTION General This report is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.
Australia This report is being distributed in Australia by DBS Bank Ltd, DBSVS or DBSV HK. DBS Bank Ltd holds Australian Financial Services Licence no. 475946.
DBSVS and DBSV HK are exempted from the requirement to hold an Australian Financial Services Licence under the Corporation Act 2001 (“CA”) in respect of financial services provided to the recipients. Both DBS Bank Ltd and DBSVS are regulated by the Monetary Authority of Singapore under the laws of Singapore, and DBSV HK is regulated by the Hong Kong Securities and Futures Commission under the laws of Hong Kong, which differ from Australian laws.
Distribution of this report is intended only for “wholesale investors” within the meaning of the CA.
Hong Kong This report has been prepared by an entity(ies) which is not licensed by the Hong Kong Securities and Futures Commission to carry on the regulated activity of advising on securities pursuant to the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong). This report is being distributed in Hong Kong and is attributable to DBS Bank (Hong Kong) Limited, a registered institution registered with the Hong Kong Securities and Futures Commission to carry on the regulated activity of advising on securities pursuant to the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong).
For any query regarding the materials herein, please contact Carol Wu (Reg No. AH8283) at [email protected]
Indonesia This report is being distributed in Indonesia by PT DBS Vickers Sekuritas Indonesia.
Malaysia This report is distributed in Malaysia by AllianceDBS Research Sdn Bhd ("ADBSR"). Recipients of this report, received from ADBSR are to contact the undersigned at 603-2604 3333 in respect of any matters arising from or in connection with this report. In addition to the General Disclosure/Disclaimer found at the preceding page, recipients of this report are advised that ADBSR (the preparer of this report), its holding company Alliance Investment Bank Berhad, their respective connected and associated corporations, affiliates, their directors, officers, employees, agents and parties related or associated with any of them may have positions in, and may effect transactions in the securities mentioned herein and may also perform or seek to perform broking, investment banking/corporate advisory and other services for the subject companies. They may also have received compensation and/or seek to obtain compensation for broking, investment banking/corporate advisory and other services from the subject companies.
Wong Ming Tek, Executive Director, ADBSR
Singapore This report is distributed in Singapore by DBS Bank Ltd (Company Regn. No. 196800306E) or DBSVS (Company Regn No. 198600294G), both of which are Exempt Financial Advisers as defined in the Financial Advisers Act and regulated by the Monetary Authority of Singapore. DBS Bank Ltd and/or DBSVS, may distribute reports produced by its respective foreign entities, affiliates or other foreign research houses pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, DBS Bank Ltd accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact DBS Bank Ltd at 6327 2288 for matters arising from, or in connection with the report.
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Company Guide
Astro Malaysia Holdings
Thailand This report is being distributed in Thailand by DBS Vickers Securities (Thailand) Co Ltd.
United This report is produced by AllianceDBS Research Sdn Bhd which is regulated by the Securities Commission Malaysia. Kingdom This report is disseminated in the United Kingdom by DBS Vickers Securities (UK) Ltd, ("DBSVUK"). DBSVUK is authorised and regulated by the Financial Conduct Authority in the United Kingdom.
In respect of the United Kingdom, this report is solely intended for the clients of DBSVUK, its respective connected and associated corporations and affiliates only and no part of this document may be (i) copied, photocopied or duplicated in any form or by any means or (ii) redistributed without the prior written consent of DBSVUK. This communication is directed at persons having professional experience in matters relating to investments. Any investment activity following from this communication will only be engaged in with such persons. Persons who do not have professional experience in matters relating to investments should not rely on this communication.
Dubai This research report is being distributed by DBS Bank Ltd., (DIFC Branch) having its office at units 608 - 610, 6th Floor, International Gate Precinct Building 5, PO Box 506538, DIFC, Dubai, United Arab Emirates. DBS Bank Ltd., (DIFC Branch) is regulated Financial by The Dubai Financial Services Authority. This research report is intended only for professional clients (as defined in the Centre DFSA rulebook) and no other person may act upon it.
United Arab This report is provided by DBS Bank Ltd (Company Regn. No. 196800306E) which is an Exempt Financial Adviser as Emirates defined in the Financial Advisers Act and regulated by the Monetary Authority of Singapore. This report is for information purposes only and should not be relied upon or acted on by the recipient or considered as a solicitation or inducement to buy or sell any financial product. It does not constitute a personal recommendation or take into account the particular investment objectives, financial situation, or needs of individual clients. You should contact your relationship manager or investment adviser if you need advice on the merits of buying, selling or holding a particular investment. You should note that the information in this report may be out of date and it is not represented or warranted to be accurate, timely or complete. This report or any portion thereof may not be reprinted, sold or redistributed without our written consent.
United States This report was prepared by AllianceDBS Research Sdn Bhd (''AllianceDBS''). DBSVUSA did not participate in its preparation. The research analyst(s) named on this report are not registered as research analysts with FINRA and are not associated persons of DBSVUSA. The research analyst(s) are not subject to FINRA Rule 2241 restrictions on analyst compensation, communications with a subject company, public appearances and trading securities held by a research analyst. This report is being distributed in the United States by DBSVUSA, which accepts responsibility for its contents. This report may only be distributed to Major U.S. Institutional Investors (as defined in SEC Rule 15a-6) and to such other institutional investors and qualified persons as DBSVUSA may authorize. Any U.S. person receiving this report who wishes to effect transactions in any securities referred to herein should contact DBSVUSA directly and not its affiliate.
Other In any other jurisdictions, except if otherwise restricted by laws or regulations, this report is intended only for qualified, jurisdictions professional, institutional or sophisticated investors as defined in the laws and regulations of such jurisdictions.
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Company Guide
Astro Malaysia Holdings
DBS Regional Research Offices
HONG KONG MALAYSIA SINGAPORE DBS (Hong Kong) Ltd AllianceDBS Research Sdn Bhd DBS Bank Ltd Contact: Carol Wu Contact: Wong Ming Tek (128540 U) Contact: Janice Chua 13th Floor One Island East, 19th Floor, Menara Multi-Purpose, 12 Marina Boulevard, 18 Westlands Road, Capital Square, Marina Bay Financial Centre Tower 3 Quarry Bay, Hong Kong 8 Jalan Munshi Abdullah 50100 Singapore 018982 Tel: 852 3668 4181 Kuala Lumpur, Malaysia. Tel: 65 6878 8888 Fax: 852 2521 1812 Tel.: 603 2604 3333 Fax: 65 65353 418 e-mail: [email protected] Fax: 603 2604 3921 e-mail: [email protected] e-mail: [email protected] Company Regn. No. 196800306E
THAILAND INDONESIA DBS Vickers Securities (Thailand) Co Ltd PT DBS Vickers Sekuritas (Indonesia) Contact: Chanpen Sirithanarattanakul Contact: Maynard Priajaya Arif 989 Siam Piwat Tower Building, DBS Bank Tower 9th, 14th-15th Floor Ciputra World 1, 32/F Rama 1 Road, Pathumwan, Jl. Prof. Dr. Satrio Kav. 3-5 Bangkok Thailand 10330 Jakarta 12940, Indonesia Tel. 66 2 857 7831 Tel: 62 21 3003 4900 Fax: 66 2 658 1269 Fax: 6221 3003 4943 e-mail: [email protected] e-mail: [email protected] Company Regn. No 0105539127012 Securities and Exchange Commission, Thailand
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