Astro’s downward spiral continues as it sinks to new low

 

Astro’s shares have plunged 95% since hitting its all-time high of RM3.70 in June 2014. (File pic)

PETALING JAYA: 

Astro Malaysia Holdings Bhd suffered another record low yesterday as investors cashed out after it posted weaker-than-expected results, and analysts turned bearish on its outlook.

The counter fell as much as 3% to 16.5 sen in morning trading, an all-time low for the beleaguered pay-television operator. It managed to stage a recovery in late afternoon trading, closing 2 sen or 11.8% higher at 19 sen, valuing the group at RM964.1 million.

A total 14.3 million shares changed hands, a six-fold increase from the four-week average daily volume of 2.4 million shares.

Astro’s fortunes have been on a downward spiral in recent years after being buffeted by intense competition from over-the-top services such as Netflix and Disney+ Hotstar that pulled away its subscribers.

Additionally, its subscriber base has also whittled away as subscribers opted for TV boxes or illicit streaming devices (ISDs) in droves, with advertising revenue being unable to offset the fall in subscriptions.

The inexorable decline of the company founded by the late tycoon T Ananda Krishnan is reflected in its battered share price.

The shares have fallen 17% year to date, 39% over the past one year, and 78% over the past five years. Since hitting its all-time high of RM3.70 in June 2014, Astro’s shares have plunged 95%.

A majority of analysts are bearish after its results for the year ended Jan 31, 2025 (FY2025) fell short of expectations, making up just two-thirds of the consensus forecast.

For Q4 FY2025, net profit plummeted 77% to RM10.49 million. However, full-year net profit more than tripled to RM129.5 million on lower finance costs and reduced amortisation of intangible assets.

In a note, Maybank Investment Bank said it expects Astro’s earnings outlook to “remain challenging” due to rising cost of living.

It has maintained its “sell” call amid uncertainty of a turnaround.

TA Research has lowered its FY2026 and FY2027 earnings forecasts on the counter by 20.7% and 31.9%, respectively.

This was primarily due to upward revisions in its content cost assumptions by 7%- 8% alongside the weaker-than-expected Q4 FY2025 results, it said.

Nevertheless, TA maintained its “buy” call on the stock but lowered its target price to 24 sen from 28 sen previously.

“We believe Astro One has the potential to serve as a key catalyst for future earnings growth, driven by its targeted approach to attracting new customer segments,” it said.

Astro One consists of three streamlined TV packages designed to appeal to entry-level viewers, sports enthusiasts, and all-access users.

Meanwhile, Astro suffered a setback of sorts after Public Investment Bank said it was ceasing coverage of the stock, citing “lack of investor interest” for dropping it from coverage.

Moving forward, Astro faces bigger problems than just losing coverage by research houses. It has a sword hanging over its head in the form of a potential tax liability totalling RM735 million.

The Inland Revenue Board dropped this bombshell on Astro last year after serving notices of additional assessment for 2019-2023 totalling RM735 million, including penalties, after disallowing deductions for production costs incurred during the period.

This massive amount will take out nearly two-thirds of shareholders’ funds if Astro fails in its appeal against the IRB’s additional tax bill. - FMT