HwangDBS optimistic of Astro outlook

Business & Markets 2013
Written by Chong Jin Hun of theedgemalaysia.com
Friday, 06 December 2013 10:11
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KUALA LUMPUR (Dec 6): HwangDBS Vickers Research Sdn Bhd has kept its
"buy" call for shares of Astro Malaysia Holdings Bhd and target price of RM3.30
for the stock.
In a note today, HwangDBS Vickers said Astro, a pay-televsion entity, has
strong earnings prospects.
"We are positive on Astro’s earnings outlook, underpinned by its dominance in
the PayTV segment through its exclusive channels.
"We believe new entrants in the existing market still have minimal presence to
destabilise Astro’s offerings, though Telekom Malaysia is gaining subscribers
through the Barclay’s Premier League matches offered by HyppTV from the
recent channel supply agreement with Astro," HwangDBS Vickers wrote in a
note today.
HwangDBS Vickers' note follows the announcement of Astro's third-quarter
financials yesterday.
Astro said net profit rose 5% to RM123.71 million in the third quarter ended
October 31, 2013 from RM118.09 million a year earlier. Revenue climbed to
RM1.22 billion from RM1.08 billion.
Nine-month (9MFY14) net profit increased to RM336.56 million from RM334.84
million a year earlier. Revenue was higher at RM3.53 billion versus RM3.13
billion.
The firm plans to pay an interim dividend of two sen a share for the quarter in
review.
HwangDBS Vickers said Astro's 9MFY14 earnings came in within the research firm's and consensus forecast.
"9MFY14 earnings constituted 72% and 74% of our and consensus’ estimates,respectively. The company also announced DPS (dividend
per share) of 2 sen, bringing 9MFY14 DPS to 6sen, representing a 93% payout," HwangDBS Vickers said.
For comparison, Hong Leong Investment Bank Bhd said Astro's 9MFY14 core net profit came in flat at RM376.6 million.
Hong Leong said the figure accounts for 77% of its forecast "but beat consensus’ estimates by making up 83% of full year forecast,"