Journey to Wealth
Astro Malaysia Holdings - USD250m Windfall On Its Way
THE BUZZ
Yesterday, the media reported that the High Court of Singapore accepted the appeal of Astro's group of companies which includes: (i) Astro All Asia Networks Limited (AAAN), (ii) MEASAT Broadcast Network Systems SB (MBNS), and (iii) All Asia Multimedia Networks FZ-LLC (AAMN) against PT First Media Tbk (PTFM)'s application to set aside the court orders which granted awards of USD250m to the trio.
OUR TAKE
Overview of events. To recap, the Astro Group and Lippo Group entered into a joint venture (JV) to establish a pay-TV business in Indonesia in 2005. In turn, the former invested heavily into the project. The JV between the two was terminated in 2008. As a result, the Astro Group sought compensation from Lippo for approximately USD250m. Of the three main claimants, MBNS is now parked under the newly listed company, Astro Malaysia Holdings (AMH) while the other two are not part of the listed company.
No changes to our forecast. We have yet to confirm the exact amount that is claimed under MBNS. Nonetheless, the management indicated that the legal tussle could be a long-drawn affair. Thus, we have yet to factor this potential one-off compensation into our financial model.
Maintain BUY, FV unchanged at RM3.37. That said, this announcement bodes well for AMH and we see the recent retracement of its share price as an opportunity to accumulate the stock. A key re-rating for the company would be the outcome of the bidding for the rights to air Barclays Premier League. We are reiterating our BUY recommendation on the stock with an unchanged FV of RM3.37 (WACC: 8.45%, TG: 1.5%).
Source: OSK
Yesterday, the media reported that the High Court of Singapore accepted the appeal of Astro's group of companies which includes: (i) Astro All Asia Networks Limited (AAAN), (ii) MEASAT Broadcast Network Systems SB (MBNS), and (iii) All Asia Multimedia Networks FZ-LLC (AAMN) against PT First Media Tbk (PTFM)'s application to set aside the court orders which granted awards of USD250m to the trio.
OUR TAKE
Overview of events. To recap, the Astro Group and Lippo Group entered into a joint venture (JV) to establish a pay-TV business in Indonesia in 2005. In turn, the former invested heavily into the project. The JV between the two was terminated in 2008. As a result, the Astro Group sought compensation from Lippo for approximately USD250m. Of the three main claimants, MBNS is now parked under the newly listed company, Astro Malaysia Holdings (AMH) while the other two are not part of the listed company.
No changes to our forecast. We have yet to confirm the exact amount that is claimed under MBNS. Nonetheless, the management indicated that the legal tussle could be a long-drawn affair. Thus, we have yet to factor this potential one-off compensation into our financial model.
Maintain BUY, FV unchanged at RM3.37. That said, this announcement bodes well for AMH and we see the recent retracement of its share price as an opportunity to accumulate the stock. A key re-rating for the company would be the outcome of the bidding for the rights to air Barclays Premier League. We are reiterating our BUY recommendation on the stock with an unchanged FV of RM3.37 (WACC: 8.45%, TG: 1.5%).
Source: OSK
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