Astro Malaysia Shares Fall Amid Weak Results, Analyst Downgrades

By Ying Xian Wong

Astro Malaysia Holdings Bhd. shares fall early Tuesday after it posted weak earnings and analysts downgraded their views on the corporate, citing a softer financial outlook and weakening shopper sentiment.
The satellite tv for pc tv supplier’s inventory fell as a lot as 6.1% to 0.62 ringgit (US$0.14) in morning commerce, bringing 12-month losses above 41%.

The declines come after Astro Malaysia posted fourth-quarter outcomes late Monday, exhibiting that internet revenue fell to MYR54.75 million from MYR126.59 million a 12 months earlier. It attributed the drop primarily as a consequence of decrease income and better prices.
Quarterly income fell 3.9% to MYR990.67 million, and the Malaysian firm mentioned it continues to have a cautious outlook as a consequence of macroeconomic headwinds.
The share-price drop additionally comes as analysts’ minimize their rankings and forecasts for Astro.
Hong Leong Funding Financial institution analyst Tan Je Jyne downgraded Astro’s inventory to carry from purchase, and minimize the goal value to MYR0.59 from MYR0.95. In a word on Tuesday, he mentioned that uncertainty within the international financial system will probably harm shopper and advertiser confidence, weighing on demand for the corporate’s merchandise. In opposition to this backdrop, it’s unclear whether or not Astro will have the ability to bolster demand for its merchandise shortly sufficient to shore up earnings, significantly within the face of rising inflationary pressures, he mentioned.
“It would take some time earlier than Astro sees any significant enchancment in its subsequent earnings,” he mentioned
Affin Hwang Funding Financial institution analyst Nadia Aquidah additionally mentioned in a word that she expects market uncertainty to weigh on households and companies, and by extension, on Astro’s earnings.
Affin Hwang minimize Astro’s fiscal 2024 and 2025 core earnings-per-share forecasts by 8% and 15%, respectively, given the “disappointing [quarterly] outcomes,” and lowered the inventory’s goal value to MYR0.55 from MYR0.60. It maintained a promote ranking on the inventory.
One factor Astro plans to do to retain prospects is embark on a “reinvestment” technique to modify extra of its Pay-TV subscribers to its new set-top packing containers, Maybank Funding Financial institution analyst Yin Shao Yang mentioned in a word. Nevertheless, that shift will increase customer-acquisition prices and compress margins, prompting the brokerage to chop its fiscal 2024 and 2025 earnings estimates for the corporate by 23% and 31%, respectively.
Maybank Funding Financial institution additionally lowered its goal value on Astro inventory to MYR0.65 from MYR0.74, and maintained a maintain ranking.
Write to Ying Xian Wong at yingxian.wong@wsj.com