PublicInvest Research

Author: PublicInvest   |   Latest post: Tue, 4 Aug 2020, 6:43 PM


Astro Malaysia Holdings Berhad - New Strategic Partnership with IQIYI

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Astro Malaysia announced that it has entered into a strategic partnership with iQIYI, a leading online video platform based in Beijing, China with more than 500m active users monthly. Based on the announcement, Astro will have the exclusive rights to broadcast iQIYI content in Malaysia via TV, On Demand and Over-The-Top (OTT) with the aim of bringing in more exciting and high quality contents to the local audience. We believe that this tie up with iQIYI will add value to Astro, as the partnership will enable Astro to expand the vernacular content being offered to the Mandarin language viewers, in line with Astro’s focus to focus more on vernacular content going forward. At this juncture, our earnings forecasts remain unchanged as we are only expecting marginal earnings impact in the near term. We maintain our Outperform rating with an unchanged TP of RM2.00.

  • World’s first iQIYI branded channel. Under the new partnership, Astro has plans to introduce a specific iQIYI branded channel which comprises of iQIYI’s extensive range of original content including dramas, variety shows and movies. Astro will be leading the customer acquisition, marketing and media sales. iQIYI’s original content broadcasted on Astro’s platform managed to garner positive views from Astro’s audience. With the partnership, Astro will be able to bring in more new quality content which should be favourable to all Mandarin vernacular viewers.
  • Results review. For the coming quarters, we expect Astro to deliver YoY improvement in earnings, largely on the back of lower content cost as it previously incurred higher cost while viewership for 2018 World Cup was weaker-than-expected. Meanwhile, Astro has hedged its USD exposure at RM4.10 over the next 6-12 months. We expect Astro to maintain a DPS of 10sen per share for FY20F, which translates to an attractive yield of 7%.

Source: PublicInvest Research - 18 Jun 2019

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