SINGAPORE (Nov 15): Phillip Capital is trimming Asian Pay Television Trust to “accumulate” as the price of the stock has risen 60% year-to-date to 60 cents, resulting in lower expected returns.
“APTV dividend yield is attractive and sustainable,” says analyst Paul Chew in a Tuesday report, “Operating cashflows are supported by a recurrent monthly cable TV subscription fees and APTV operates in a monopolistic environment.”
APTV’s 3Q17 revenue and EBITDA came in line with Phillip’s estimates. Revenue rose 6.7% to $84.4 million from a year ago, driven by non-subscription revenue and appreciation of TWD, which rose 2.5% y-o-y against the SGD. EBITDA rose 8.8% to $50.7 million while PATMI fell 15.9% to $9 million.
See: Asian Pay Television Trust reports unchanged 3Q DPU of 1.625 cents
APTV’s management has guided 6.5 cents DPU for FY18. This is unchanged from FY17 and still represents a 10.7% dividend yield.
In 3Q, cable subscribers were stable q-o-q at 762,000 and churn rate low at 0.7%.
“As the lumpy analogue switch-off ends this year, we expect total capex to decline from $80 million in FY17 to $45 million in FY18,” says Chew.
“We shaved our FY17 earnings by 15% due to higher FX loss and higher effective tax,” says Chew, “as we enter 2018, cash flows should improve as capital expenditure for premium digital ends. There is no change in our target price of 64 cents.”
