MBSB Investment Bank Bhd (MBSB Research) maintained its POSITIVE call on the telecommunications sector, highlighting Astro Malaysia Holdings as a potential merger and acquisition target as the pay-TV operator continues to grapple with industry disruptions while retaining valuable content assets and intellectual property.
The research house noted that Astro’s market capitalisation has fallen sharply from a peak of about RM18 billion to around RM300 million, with its share price declining from RM3.68 in 2014 to a record low of RM0.06. Despite mounting challenges from streaming platforms, content piracy and the loss of major broadcasting rights such as the FIFA World Cup, Astro remains profitable, posting a net profit of RM1.6 million in the first quarter of FY2027.
Instead, MBSB Research sees stronger strategic value in a potential combination between Astro and Telekom Malaysia (TM). It said Astro’s content portfolio could enhance TM’s existing Unifi TV offerings and strengthen its bundled broadband proposition.
However, the research house also acknowledged that TM’s current focus on fibre expansion, 5G backhaul investments and its enhanced dividend policy may limit appetite for any near-term acquisition activity.
MBSB Research said Astro’s library of original content and intellectual property remains a key attraction, making the group a conceivable acquisition target. It added that operating as a standalone entity may no longer be the most viable path given the increasingly competitive media landscape and the company’s sizeable fixed operating costs.
While market speculation has long centred on a potential merger between Astro and Maxis due to their historical common shareholder, the research house believes such a scenario appears less compelling strategically. It noted that Maxis has focused its acquisition strategy on strengthening its enterprise business over the past several years.
