KAF Equities Sdn Bhd has reinstated a “Buy” recommendation rating for Astro Malaysia Holdings Bhd and a DCF derived target price of RM1.25.
It says the continuous easing of SOP restrictions and the reopening of the economy should serve as a catalyst for earnings recovery over the coming quarters.
KAF says it believes Astro’s aggressive measures of strengthening the OTT platform, serving the underserved market, venturing into potential business streams, and growth in the home shopping segment will help speed up the pace of its recovery.
“Overall, dividend yield remains moderate at 6% (FY21: 5.5%) with a forecast DPS of 6sen for FY22,” it says.
On Adex outlook, it expects an uptick in Adex in the coming quarters (FY22F: RM459.8 million vs FY21 RM427 million, +7.68%yoy).
KAF says that In-line with the progression into phase 4 of the National Recovery Plan (NRP), permission has been granted to resume drama, ads, and documentary shootings.
Moving forward, KAF says the improvement in consumer sentiment as a result of the lifting of lockdown restrictions and high vaccine rate will further support the increase in Adex.
