Astro Declines 5.26% On Challenging Outlook
Astro Malaysia Holdings Bhd’s share price fell 5.26% to close at RM0.180 on Tuesday, with 574,090 shares traded. The stock opened at RM0.190, reached a high of RM0.195, and touched a low of RM0.180 during the session (11.10 am).
The decline followed recent updates on Astro’s tax settlement with the Inland Revenue Board, where the company agreed to claim production costs over six years instead of three.
Although Maybank Investment Bank Bhd (Maybank IBG) described the cash flow impact as negative in the short term but neutral in the long term, it maintained a ‘SELL’ call on Astro, citing a still-challenging earnings outlook.
Maybank IBG previously adjusted Astro’s weighted average cost of capital (WACC) to 12.4% due to a higher risk premium following the tax case and set a revised target price of RM0.12. The house expects consumer headwinds, including higher electricity tariffs and subsidy rationalisation, to further weigh on Astro’s Pay-TV subscriber growth and earnings prospects.
At current levels, Astro’s share price is approaching Maybank IBG’s revised valuation, with downside risks persisting.
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