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Friday, June 19, 2009

Value Buy Astro All Asia Networks

Astro All Asia Networks plc is a Malaysia-based investment holding company engaged in the provision of management services. The Company’s business segments comprise: Malaysian multi channel television, which is engaged in the provision of multi channel direct-to-home subscription television and related interactive television services in Malaysia; Radio, which provides radio broadcasting services; Library licensing and distribution, which is engaged in the ownership of a library of Chinese filmed entertainment and the aggregation and distribution of the library and related content, and Others, which includes a magazine publishing business, interactive content business for the mobile telephony platform, Malaysian film production business, talent management; creation of animation content, television content aggregation and distribution, ownership of buildings, its regional investments in media businesses and investment holding companies
Astro is the sole provider of satellite DTH TV service in Malaysia with exclusive DTH rights until 2017. It's the biggest pay-TV operator in Southeast Asia with 2.56M residential subscribers. Its total penetration of Malaysia TV households is 44% todate. This is a highly cash-generative business which generates around RM 0.13 of cash flow per share - per year on average.
Astro is spreading its wings to India,Indonesia(but failed) and Middle East. Due to its sheer size of population,you'll go crazy to estimate its potential future cashflow derived from these countries.What you can estimate is the value of business in Malaysia. Its Malaysian DTH monopoly business is valued at RM 3.50 to RM 4.00 per share. But current share price is @ around RM 2.80 per share.At current price,it's selling at a discount because stability of Malaysian business and future potential is not included.
Major shareholders are Tan Sri Ananda Krishnan (42.4%), Khazanah Nasional Bhd (21.4%) and
Employees Provident Fund (7.3%).Recently,we heard rumuors that Astro,Measat and Maxis will be 'lumped' together for creating more value through cost savings and synergy.In fact,this rumuor is not new and has been circulating in the industry even before you guys know it through local newspaper.
This event is very likely to take place some time in the future if the share prices of Measat and Astro is staying too long at low valuation.If you have made money in my previous recommendations (Mah Sing,SP Setia,HIRO,BJLAND and others),Astro is the next place to diversify your investment to capitalise on its future potential.
Please read my previous posts on Astro ( to gain more knowledge on it.

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