THE BUZZ
As reported by various media, Astro All Asia Network
(ASTRO), Malaysia’s largest paytelevision broadcaster owned by Tan Sri Ananda
Krishnan, has been approached by investment bankers about a possible share sale
and Initial Public Offering. It is said that ASTRO could raise about USD1.5bn
(RM4.6bn) in an IPO as soon as the end of this year.
OUR TAKE
Privatised in 2010. To recap, ASTRO was taken private by
Astro Holdings (AH) on 14 June 2010, which
already owned 72.91% prior to
the privatisation. Note that AH was formed by billionaire Ananda Krishnan
with 42.34%, Khazanah with 21.39%, EPF with 8.61% and Tun Mohammed Hanif Omar
with 9.81%. At the privatization price of RM4.30 per share, the share was
pegged at 30x 1 year forward PER and 9x EV/EBITDA.
Potential valuation
of ASTRO. Looking back at what Ananda Krishnan has done on the relisting of Maxis, we believe ASTRO will
strip off the 20% stake held in its
Indian asset, SunDirect TV, the largest
Direct-to-Home pay TV in India
with household subscribers of 5 million, which reported core losses of RM100m
p.a in 2010, prior to the IPO. Thus, stripping off this asset, we estimate
ASTRO could make a PBT of RM530m. Assuming ASTRO’s Malaysia operation makes
about RM450m p.a and assuming a PE of 25x, the potential market capitalization
of ASTRO could be as big as RM11.25bn. Without its overseas operation, ASTRO is
actually a cash cow, with EBITDA of about RM750m-800m. Also, with 4.1m
subscribers back in 2010 and given Malaysia has only 6.5m households, we expect
its subscriber’s growth to
stabilize at the mid single digitlevel.
Boosting his cash
pile here for India? We believe
should the IPO materialize, it will primarily involve an
offer for sale of existing shares based on what we saw in Maxis’relisting
back in 2010. This jives well with the rumors that Tan Sri Ananda Krishnan is beefing
up his cash hoard following the sale of Pan Malaysia Pool and his Power Assets to
1 Malaysia Development Berhad. We believe the billionaire would likely plough
back his cash into his existing telco business in India especially given the
ongoing legal suit filed by India’s Central Bureau of Investigations
Sector re-rating.
Should ASTRO make a comeback to the local bourse, we believe it will be a major
re-rating for the Media sector given that it could emerge as the largest Media
stock in Malaysia with an estimated market capitalization of more than RM10bn. We
see Media Prima (BUY, FV RM3.01) as the likeliest candidate to have a potential
upward rerating since it is the closest peer to ASTRO, and is the current
single largest listed media company within the free-to-air television segment.
Source: OSK188
No comments:
Post a Comment