STOCK FOCUS OF THE DAY
Astro Malaysia: Beating the odds like Astro Boy BUY
We are upgrading Astro Malaysia Holdings (Astro) from a HOLD to BUY with a higher fair value of RM3.10/share (previously RM2.90/share), derived from DCF with a discount rate of 8% and terminal growth rate of 2%. We have tweaked our FY18F-FY20F net profit forecasts by 1-5% for housekeeping reasons.
We came away from a company visit gaining more clarity on the company's direction and prospects. We believe Astro would see improvements in adex in FY19 due to two notable sporting events this year, namely the PyeongChang 2018 Winter Olympics and the 2018 FIFA World Cup. In our opinion, the events are far more enthralling compared to those of 2017, during which the SEA Games and Merdeka celebration were the only notable events. From our historical checks, Astro's TV adex grew 7% YoY and 39% QoQ during the quarter that the 2014 FIFA World Cup was held (2QFY15). Similarly, the group's radex expanded 9% YoY and 35% QoQ.
QUICK TAKES
Gaming Sector: China to legalise gambling on Hainan? NEUTRAL
Plantation Sector: News flow for week 29 January – 2 February NEUTRAL
ECONOMIC HIGHLIGHT
US: Door now wider for March rate hike
NEWS HIGHLIGHTS
Monetary policy: Bank Negara not on monetary tightening trend
JHM: Anticipates boost from new orders in 2H18
Investment: KWAP targets ‘sustainable‘ firms
Taxation: Tax reprieve in sight
DISCLAIMER:
The information and opinions in this report were prepared by AmInvestment Bank Bhd. The investments discussed or recommended in this report may not be suitable for all investors. This report has been prepared for information purposes only and is not an offer to sell or a solicitation to buy any securities. The directors and employees of AmInvestment Bank Bhd. Bhd may from time to time have a position in or with the securities mentioned herein. Members of the AmBank Group Bhd and their affiliates may provide services to any company and affiliates of such companies whose securities are mentioned herein. The information herein was obtained or derived from sources that we believe are reliable, but while all reasonable care has been taken to ensure that stated facts are accurate and opinions fair and reasonable, we do not represent that it is accurate or complete and it should not be relied upon as such. No liability can be accepted for any loss that may arise from the use of this report. All opinions and estimates included in this report constitute our judgment as of this date and are subject to change without notice.
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