PublicInvest Research

Author: PublicInvest   |   Latest post: Tue, 22 Jun 2021, 9:57 AM


Astro Malaysia Holdings Berhad - Teaming Up With Disney+ Hotstar

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Astro Malaysia (Astro) will be collaborating with The Walt Disney Company to offer Disney+ Hotstar on 1 June. This follows the news last week that Disney was said to be considering shutting down the majority of its TV channels in Southeast Asia and Hong Kong later this year as it plans to shift its focus to the direct-to-customer business model. Disney+ Hotstar can be subscribed directly via its own streaming platform while it is also made available for Astro’s Movies Pack subscribers for an additional RM5/month. All in all, we make no changes to our earnings as we believe Astro’s content cost could rise despite a potential increase in ARPU. Given its relatively high dividend yield of c.7%, we maintain our Outperform rating.

  • Brief history. Disney+ was first launched in the US back in 2019 to provide streaming service. When Walt Disney Company bought 21st Century Fox in 2018, Star India, which owns Hotstar streaming service, became a part of the Walt Disney Group. Instead of developing a dedicated app for Disney+, existing Hotstar streaming platform was later rebranded to Disney+ Hotstar. The platform now includes access to Disney+ original content, movies and series from HBO, Fox and Showtime.
  • Disney+ Hotstar in Malaysia. This will be the latest video streaming platform in Malaysia and is officially priced at RM54.90 for 3 months (or RM18.30 per month). It will be made available to customers on both Android and iOS devices as well as Smart TVs. Each account can support two concurrent streams. Simultaneously, Astro has been appointed the official distributor of Disney+ Hotstar and will be available to its Movies Pack customers for an additional RM5 per month while its non-Movies Pack subscribers may access the streaming service via other bundles to be made known later.
  • Limited earnings upside. In our view, we see limited earnings upside from this partnership with Disney+ Hotstar as we believe content cost could also go up, though ARPU may improve on additional cost to subscribers to sign up under the Movies Pack. Also, we do not rule out the possibility of existing Astro subscribers opting for direct subscription to Disney+ Hotstar as the monthly rate looks attractive. Our earnings forecasts remain unchanged at this juncture.

Source: PublicInvest Research - 5 May 2021

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