Astro share price soars 22%; sparks speculation on privatisation

KUALA LUMPUR (March 8): Shares in Astro Malaysia Holdings Bhd surged 13.5 sen or 22.13% in the afternoon trading session on Wednesday (March 8) to an intra-day high of 74.5 sen.

The counter later pared gains to close at its three-month high of 73 sen, up 12 sen or 19.67%, valuing the group at RM3.81 billion.

Trading volume swelled to 72.04 million, which is equivalent to over 1% of its share base and 12 times its two-month average volume of six million shares, placing it on Bursa Malaysia’s most active list.

The sharp gain also slotted the pay-TV services provider among Bursa Malaysia’s top gainers.

This is the biggest single-day jump in terms of percentage on Astro's share price. Speculation of privatisation resurfaced following the strong rally within three trading hours against the backdrop that Astro's share price has been trending below RM1 since the global equity rout in 2020.

If that materialises, this would be the second time that its controlling shareholders take the pay-TV service provider private.

In 2010, the two major shareholders, tycoon Ananda Krishnan together with Khazanah Nasional Bhd took Astro All Asia Networks PLC, which also housed overseas operations then, private at RM4.30 per share.

Two years later, the duo relisted the group but without the overseas operations at RM3 per share.

Currently, Ananda controls a 41.29% stake, while Khazanah 20.67%.

Nonetheless, some quarters said the high borrowings of RM3.55 billion might not make Astro an attractive takeover target.

Besides high content costs, the group is facing piracy issues that has eaten into its subscriber base.

Year to date, the counter has risen 12.31%. However, over a one-year period, the stock has fallen almost 22% from 93.5 sen, as the group’s earnings were hit by financing costs and higher content costs due to the weak ringgit against the US dollar.

On Jan 12 this year, the Employees Provident Fund ceased to be the group’s substantial shareholder with a 4.98% stake.

Earnings of the dividend-paying media firm have been on the decline since its peak in the financial year ended Jan 31, 2018 (FY2018), when it booked RM770.64 million in net profit on RM5.53 billion in revenue.

For the nine-month period ended Oct 31, 2022 (9MFY2023), net profit fell 39% to RM204.29 million or 3.92 sen per share from RM334.29 million or 6.41 sen per share, as revenue fell 10.64% to RM2.81 billion from RM3.14 billion on decrease in merchandise sales and subscription revenue.

Dividend payout in the period stood at three sen per share, from 4.5 sen per share in 9MFY2022.

The group will announce its 4QFY2023 results on March 27.