Analysts upbeat on Astro’s advertising revenue, Arpu

by JF Fri 14 Jun 2013, 11:05

PETALING JAYA: [url=http://archives.thestar.com.my/search/?q=Astro Malaysia Holdings Bhd]Astro Malaysia Holdings Bhd[/url]’s higher advertising revenue and subscriber and average revenue per user (Arpu) growth, which boosted its revenue by 14.2% for the first quarter ended April 30, outweigh higher depreciation and marketing expenses for the said quarter.
Analysts are upbeat on the country’s biggest pay-TV firm’s Arpu growth on the back of product roll-outs, and expect advertising expenditure income to improve further.
Of the 27 analysts covering the counter, 18 have called the pay-TV content player a “buy”, with seven tagging it a “hold” and two a “sell”,Bloomberg data showed, while the consensus target price has been pegged at RM3.25.
HSBC Global Research said in an investor’s note that it preferred Astro as the proxy for pay-TV growth in the country, highlighting its 66% penetration rate for the high-definition (HD) platform and enhanced content offerings as increasing its stickiness factor.
“Management conceded that it was still early to talk about the Internet-protocol television (IPTV) partnership with [url=http://archives.thestar.com.my/search/?q=Maxis Bhd]Maxis Bhd[/url], but we note that existing HD set top boxes allow Astro to provide both IPTV and direct-to-home satellite services to subscribers,” it said, noting that additional bundling options to 1.1 million Maxis subscribers would drive up Arpu levels as adoption rates improve.