KUALA LUMPUR (March 26): Shares of Astro Malaysia Holdings Bhd (KL:ASTRO) hit another record low on Wednesday, as investors remained wary of the pay-television operator’s outlook, amid softening advertising expenditure and declining subscription.

Analysts slashed their estimates after a set of weaker-than-expected results for the year ended Jan 31, 2025 (FY2025) which accounted for just two-thirds of the consensus forecast, and majority of them remained bearish while telling investors to avoid the stock.

“Going forward, we expect Astro’s earnings outlook to remain challenging” due to rising cost of living, Maybank Investment Bank said in a note and maintained its ‘sell’ call amid uncertainty of a turnaround.

The counter slipped as much as 3% to 16.5 sen on Bursa Malaysia. At market close, Astro’s share price rebounded and was up two sen or 11.76% to 19 sen, giving it a market capitalisation of RM887.2 million. Some 14.33 million shares changed hands.

Astro’s stock has declined 17% since the start of 2025, extending a downward spiral since seven years ago, as the company fought intense competition from over-the-top media services such as Netflix and other online offerings that ate into its subscriber base.

Advertising expenditure, or adex, across the industry has also been under pressure, while major sporting events last year such as the Olympics and UEFA European Championship also failed to translate into a major revenue boost for Astro.

“We attribute this to weak consumer sentiment and intense competition from non-traditional digital platforms,” Public Investment Bank said in its parting note after ceasing coverage of the stock. The house also cited lack of investor interest in the stock for dropping the stock from coverage.

Astro now has five ‘sell’ and two ‘buy’ calls from research houses, with an average 12-month target price of 16 sen, according to Bloomberg.

Further, the company faces a massive potential liability totalling RM735 million that will take out nearly two-thirds of shareholders’ funds if it fails in its appeal against the Inland Revenue Board’s (IRB) additional tax bill, Kenanga Investment Bank flagged, keeping the stock on an ‘underperform’ call.

The case began last year after the IRB served notices of additional assessment for 2019-2023 totalling RM735 million, including penalties, after disallowing deductions for production costs incurred during the period.

For the fourth quarter ended Jan 31, 2025 (4QFY2025), Astro reported a 77% drop in net profit to RM10.49 million. However, full-year net profit more than tripled to RM129.5 million, supported by lower finance costs and reduced amortisation of intangible assets.

Read also:
Astro closes FY2025 with higher full-year net profit despite 4Q drop
High Court grants interim stay against IRB on its RM734m claim of additional tax on Astro