Astro: Earnings Continued To Rise

Results Update

For QE31/1/2018, Astro's net profit rose 24% q-o-q or 25% y-o-y to RM182 million while revenue dropped 0.6% q-o-q or 0.7% y-o-y to RM1.39 billion.

Revenue dropped y-o-y mainly due to a decrease in subscription revenue, offset by higher merchandise sales, advertising and production revenue. The decrease in subscription revenue was mainly due to lower package takeup. The increase in merchandise sales was due to increase in number of products sold which was mainly driven by the tactical campaigns executed for the current quarter. The increase in advertising revenue was due to higher spending for year-end festive celebration.

Net profit increased by RM37.6m or 26.3% compared with the corresponding quarter due to lower net finance costs. Lower net finance cost was due to favorable unrealised forex gain arising from unhedged non-current balance sheet liabilities comprising, finance lease liabilities and vendor financing. The increase was offset with decrease in EBITDA and higher tax expenses.


Table 1: Astro's last 8 quarterly results


Graph: Astro's last 26 quarterly results

Valuation

Astro (closed at RM2.02 yesterday) is now trading at a trailing PE of 13.7 times (based on last 4 quarters' EPS of 14.79 sen). In addition, Astro paid out dividend quarterly which amounted to 12.50 sen for the last 4 quarters; giving the stock an attractive DY of 6.2%. Based on these PER and DY, Astro is deemed fairly attractive.

Technical Outlook

Astro dropped from RM2.90 in October last year to a low of RM2.02 yesterday. It is now revisiting the low when the stock was re-quoted in October 2012.


 Chart: Astro's weekly chart as at Mar 28, 2018 (Source: Malaysiastock.biz)

Conclusion

Based on satisfactory financial performance & attractive valuation, I believe Astro is a good stock for long-term investment.

Note:

I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.