Astro Malaysia upgraded by several research houses

Following the release of Astro Malaysia Holdings Berhad’s (Astro) third quarter results, a few research houses have upgraded the stock of Malaysia's only satellite broadcaster.

The company held a conference call for analysts and fund managers where Astro's Chief Financial Officer, Shafiq Abdul Jabbar and Chief Executive Officer-designate Henry Tan Poh Hock explained key financial and business positions Astro is undertaking.

According to CIMB Research, the briefing yielded no surprises while UOB KayHian notes that cost incentive measures are yielding positive results.

Astro intends to streamline its operating costs through various cost optimisation efforts. While no specific plans have been mentioned, management alluded that it aims to bring down costs across the board, including content cost and other expenses such as marketing and distribution, administrative and maintenance.

AmBank Research however believes the company is heading on the right track.

AmBank upgraded their 'hold' call on Astro to 'buy' with an unchanged fair value of RM1.66 per share.

Astro's core net profit came in line with most analysts expectations at RM178mil, bringing 9MFY19 core profit to RM404mil. This is after excluding unrealised forex losses amounting to RM59mil due to mark-to-market revaluation of M3B finance lease liabilities.

CIMB notes that Astro has been working on optimising its expenses since FY1/18, and during the briefing, the group said it will further enhance the cost-rationalisation measures over the next few months.

Among the plans announced is the cessation of operations for Tribe OTT and live streaming platform Tamago in 4QFY1/19. The group said any cost savings from the closure of these services will be redeployed to its growth engines, particularly its 60%-owned Go Shop business.

Astro's major shareholders are Ananda Krishnan (41 per cent), followed by Khazanah Nasional (20.7 per cent), and the Employees Provident Fund (6.5 per cent).