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RHB Research Maintains 'Buy' On Astro
Last update: 12/09/2013
KUALA LUMPUR, Sept 12 (Bernama) -- RHB Research has maintained a 'buy' call on Astro Malaysia Holdings Bhd for its strong cash-generating business model as well as disciplined capital expenditure to drive growth.
"Moving forward, Astro will continue its strategy to provide high-quality content and viewing experience for its customers to maintain market leadership.
"However, its current high expenditure is inevitable in exchange for its future growth including IPTV service update and customer swap to Astro Beyond set top boxes (STB) exercise," it said in a research note Thursday.
While revenue continued to grow positively in the first half of financial year 2014, its bottomline was pressured by high operating expenses, high depreciation of STB and software amortisation.
Astro generated free cash flow of RM469 million, more than double its net profit of RM213 million, that led to a two sen dividend payout in the second quarter financial year 2014.
"Thus, we keep our dividend payout ratio at 75 per cent at this juncture, which is the minimum promised by Astro," it added.
Nevertheless, the research house said slow growth in pay-TV household penetration rate and high expenses as well as emergence of new players would likely be the stumbling block for Astro.
-- BERNAMA
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Source: Bank Negara Malaysia |
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