ASTRO MALAYSIA HOLDINGS BHD

By AmInvestment Bank Hold Fair value: RM1.81

BROADCASTING network Astro Malaysia maintained its position despite the Communication and Multimedia Ministry saying that it is open to suggestion of other players competing with Astro to provide paid television broadcasting services in the country.

Deputy Minister Eddin Syazlee Shith told the Dewan Negara that the ministry was ready to grant Content Application Service Provider (CASP) individual licences to interested companies, subject to certain conditions, among which the companies should be set up in Malaysia with a paid-up capital of RM500,000.

A total of 35 companies have been granted individual CASP licences to offer broadcasting services throuh various platforms.

Four of these companies – Ansa Broadcast Sdn Bhd, Jaringan Mega Sdn Bhd, Smart Digital International Sdn Bhd and High End Net Sdn Bhd – were allowed to broadcast services via satellite.

A total of 56 companies held the CASP licences as at June 30, 2018.

Analysts believe this will not change the competitive landscape significantly as Astro’s exclusive rights and privileges to broadcast live content through satellite services to the public since 1997 have expired on Feb 27, 2017.

Astro can still broadcast via satellite on a non-exclusive basis as its licence under the Communications and Multimedia Act 1998 is valid until Feb 1, 2020.

In the first quarter of financial year 2019 (FY19), Astro’s household rate stood at 75% for its residential pay-TV and NJOI customers.

AmInvestment Bank believes the pay-TV segment is saturated and will continue its declining trend as consumers’ preferences shift towards streaming content through digital and over-the-top platforms.

Analysts have maintained “hold” on the counter with unchanged forecasts and fair value of RM1.81 per share, based on a discounted rate equivalent to its weighted average cost of capital of 9% and a terminal growth rate of 0%.