KUALA LUMPUR: Astro Malaysia Holdings is expected to see a 40 per cent year-on-year rise in its 2015 earnings due to higher average revenue per user and the absence of new B.yond decoder-related expenses.
UBS Securties Malaysia Sdn Bhd viewed that with the lagging share price performance of Astro, its forward looking valuations now look reasonable.
"We expect Astro's revenue to hold up relatively well despite Malaysian consumers adjusting their spending patterns due to higher cost of living (arising from subsidy rationalisation and a weaker currency)," it said.
But it lowered its earnings forecast for Astro in 2014 to factor in higher financing costs due to higher currency losses from unhedged vendor financing and higher depreciation/amortisation charges for 2015-2016.
It said this is due to new transponders coming online and other personal protective equipment charges being aggressively amortised.
"After lowering our estimates by five per cent, nine per cent, 10 per cent for financial year 2014 (FY14), FY15 and FY16E, we are closer to consensus earnings forecasts," it said in a research note.
The research firm maintained its "buy" call on Astro and raised its target price to RM3.80 from RM3.50 previously.
Astro shares closed two sen higher to RM2.99 yesterday from Friday's close.