July 20 2012 – KUALA LUMPUR: The relisting of Astro on Bursa Malaysia will drive a re-rating for the media sector as the company is likely to emerge as the largest media stock by market capitalisation.
OSK Research Sdn Bhd (OSK Research) said although Astro’s long-term prospects appear to be less attractive, the company might be positioned as a dividend play with its highly cash generative local pay-TV business.
“If we were to exclude its overseas operations, Astro is actually a cash cow, chalking up earnings before interest, taxes, depreciation and amortisation of RM800 million to RM1 billion a year and thereby could be positioned as a dividend play,” it said in a research note yesterday.
It said Media Prima would benefit the most from the sector’s re-rating with it being the closest peer to Astro.
Media Prima is currently the largest free-to-air TV operator in the country, commanding the lion share of viewership at 48 per cent, followed by Astro with a 39 per cent share.