OCBC Report 12 Sep 13

Astro: Maintain BUY with lower MYR3.21 FV
Astro Malaysia Holdings Berhad (Astro) saw 1H14 revenue
+13% at MYR2314.1m, meeting 24.5% of our full-year
forecast, while net profit eased 2% to MYR213.0m, or
21.4% of our FY14 forecast. Astro has declared another 2.0
sen interim dividend (30 Sep entitlement date/18 Oct
payment date), bringing its payout so far to 4.0 sen. While
1H14 results were tracking slightly below our forecast, we
opt to leave our estimates unchanged as we still expect
Astro to gain traction in both customer and ARPU growth.
We are also keeping our free cash-flow assumptions for
now. However, our DCF-based fair value dips slightly from
MYR3.26 to MYR3.21 due to a higher risk-free rate
assumption. But given that there is still a total return of
11%, we maintain BUY on the stock.
More reports:
- Keppel Land: Sells stake in Indonesian hotel
News Headlines
• US stocks tilted mostly higher on Wed, with the Dow
industrials tallying a third day of triple-digit gains, as
reduced worry about Syria countered Apple’s sharp drop.
• Xyec Holdings priced the first-ever Japanese IPO on
Catalist at 26 S cents per share in a S$6.5m fully placed
stock sale. The firm will close its offer of 25m new
placement on 16 Sep and list on 18 Sep.
• SingTel and Optus Business announced they have signed
a A$530m agreement with ANZ to provide
telecommunication and managed services for a further
five years.
• Impairment loss of S$3.1m saw the fiscal first-quarter
net profit of Popular Holdings fall 18.8% year on year to
S$5.32m from S$6.56m.
• Halcyon Agri has signed a term sheet to acquire PT
Golden Energi, an Indonesian rubber producer, for
US$7m.
• Thailand's largest energy firm, PTT Pcl, plans to sell its
palm oil business in Indonesia worth an estimated
US$300-400m as part of moves to divest non-core
businesses.
Key Singapore Indices
Close Chg % Chg
STI 3108.2 -15.7 -0.5
Catalist 190.7 2.9 1.6
Finance 794.2 -1.9 -0.2
Property 710.5 -0.3 0.0
Electronics 692.6 1.4 0.2
Vol(m) 3710.6 -1540 -29.3
Val(S$m) 1337.8 -146.5 -9.9
World Indices
Close Chg % Chg
Dow Jones 15326.6 135.5 0.9
Nasdaq 3725.0 -4.0 -0.1
S&P500 1689.1 5.1 0.3
FTSE 6588.4 4.4 0.1
KLCI 1768.5 3.5 0.2
Hang Seng 22937.1 -39.5 -0.2
Nikkei 14425.1 1.7 0.0
SET 1411.2 18.0 1.3
KOSPI 2003.9 9.8 0.5
TWSE 8209.0 0.2 0.0
Market Statistics (SG)
STI 52-week range 2,932 3,465
No. of gainers 360
No. of losers 233
No. of unchanged 178
Economic Statistics
S$/US$ 1.3 0.0
Yen/US$ 99.9 0.0
3-mth S$ SIBOR 0.4 0.0
3-mth US$ SIBOR 0.3 0.0
Crude futures (US$) 107.7 0.1
Research Team
(65) 6531 9800
e-mail: info@ocbc-research.com
OCBC Investment Research
Market Pulse
12 Sept 2013
2
Astro: Maintain BUY with lower MYR3.21
FV
● 1H slightly before forecast
● Still highly cash generative
● BUY with lower MYR3.21 FV
1H tracking slightly below forecast
Astro Malaysia Holdings Berhad (Astro)
reported 2QFY14 revenue of MYR1188.3m,
+11% YoY, as the Pay TV subscription
revenue climbed 10% YoY to MYR991.2m,
while TV Ad revenue improved 7% YoY to
MYR87.0m. But net profit grew at a slower
5% YoY to MYR98.9m, as EBITDA margin
eased from 34.7% in 2Q13 to 33.8% in
2Q14. Management noted that the recent
central bank measures to combat higher
inflation had affected the disposable income
of viewers slightly. For 1H14, revenue
gained 13% to MYR2314.1m, meeting 24.5%
of our full-year forecast, while net profit
eased 2% to MYR213.0m, or 21.4% of our
FY14 forecast. Astro has declared another
2.0 sen interim dividend (30 Sep entitlement
date/18 Oct payment date), bringing its
payout so far to 4.0 sen.
Capex cycle to peak in FY15
As before, management remains relatively
upbeat about its prospects, as customer and
ARPU growth continue, with increased
momentum on Astro B.yond STB swap
(replacing the older legacy boxes). With
current ARPU hovering around MYR95
(+3.4% YoY), we think it should be on track
to achieve its MYR130 ARPU target by FY18.
As before, management expects operating
expenses to peak in FY14. Furthermore,
Astro expects its capex to peak in FY15,
further strengthening its highly cashgenerative
case (which implies room for
better-than-expected dividend payout in our
view).
Maintain BUY with lower MYR3.21 FV
While 1H14 results were tracking slightly
below our forecast, we opt to leave our
estimates unchanged as we still expect Astro
to gain traction in both customer and ARPU
growth. We are also making no changes to
our free cash-flow assumptions for now.
However, our DCF-based fair value dips
slightly from MYR3.26 to MYR3.21 due to a
higher risk-free rate assumption. But given
that there is still a total return of 11%, we
maintain BUY on the stock. (Carey Wong)
. . . . .
Keppel Land: Sells stake in Indonesian
hotel
KPLD reported that it has entered into an
agreement for a subsidiary to sell its 50%
stake in PT Pantai Indah Tateli, a Indonesian
company which owns Hotel Sedona Manado
in Indonesia, for USD 7.0m (S$8.8m). The
price was arrived at on a willing-buyer,
willing seller basis and took into account
prices of comparable properties in the
vicinity. We expect some divestment gains in
the ballpark of S$3.0-5.0m from this sale,
given that the unaudited book value
attributable to KPLD’s stake was S$3.2m as
at 31 Aug 2013. Given the size of the
transaction, however, the impact on RNAV is
likely to be limited. Maintain BUY with an
unchanged fair value estimate of S$4.09
(30% RNAV disc.) (Eli Lee)