SINGAPORE (Mar 1): Phillip Capital is maintaining “accumulate” on Asian Pay Television Trust (APTV) with a lower target price of 62 cents from 64 cents previously to account for lower ARPU and higher cash taxes in FY18.
This comes after the group’s 4Q17 revenue and EBITDA came in line with expectations, although Cable TV average revenue per user (ARPU) was softer than expected in 4Q, Phillip’s head of research Paul Chew attributes to customers taking advantage of a discount offered by pre-paying their three-month bundles over the period.
Chew also highlights that the corporate tax hike in Taiwan, which is due to rise from 17-20%, will hurt the group’s onshore income in the country.
See: Asian Pay Television Trust declares DPU of 1.625 cents for 4Q17
As such, Chew has lowered his FY18 earnings estimates for the group by 10%, but emphasises that he continues to like the stock for its attractive dividends, supported by recurrent monthly cable TV subscription fees.
He also expects cash flows to improve in 2018 as capex for premium digital ends.
“After remaining flat for the past five quarters, we saw net adds of 2000 subscribers in 4Q17. The improvement was due to more attractive price and broadband speed being offered, such as 300MBps plans,” adds Chew on the group’s 4Q17 set of results.
As at 12.25pm, shares in APTV are trading 0.9% lower at 56 cents, or 0.68 times FY18 book.
