Asian Pay Television Trust - Phillip Securities 2020-11-16: Dividends Maintained For FY21

ASIAN PAY TELEVISION TRUST (SGX:S7OU)

Asian Pay Television Trust - Dividends Maintained For FY21

Asian Pay TV Trust (SGX:S7OU)'s 3Q20 revenue and EBITDA were within our expectations, at 76%/78% of our FY20e forecasts.
Asian Pay TV Trust's 3Q20 revenue rose 4% y-o-y and EBITDA, 5%. FX contributed 6.3% points to the improvements. See Asian Pay TV Trust Announcements.

Cable subscribers contracted 5,000 q-o-q to 716,000. Offset by higher premium digital TV (+10,000) and broadband (+2,000) subscribers.
Management guided that dividend of 0.25 cent/quarter will be maintained for FY21. Our forecasts are largely unchanged.
Maintain BUY on Asian Pay TV Trust and target price of S$0.15. Our valuation is benchmarked to 9x EV/EBITDA, a discount to Taiwanese peers. Asian Pay TV Trust's dividend yield of 8.5% is attractive and sustainable.

YTD capex is down almost S$10mn. Asian Pay TV Trust is guiding for lower capex from 2020 onwards. Hefty investments to increase fibre capacity are slowing down. These investments were made to raise the bandwidth of its broadband offerings and in preparation for its 5G data backhaul business from mobile operators.

Cable TV subscribers were down 5,000 this quarter (2Q20: -4,000). The churn was due to piracy and competitively-priced IPTV. Mitigating the decline is the growth in both premium digital TV and broadband. Total subscriber base is up 2% y-o-y to 1.19mn.

Financials this year have been lifted by a strong Taiwan dollar, by around 6%. Operationally, we are incorporating lower revenue and EBITDA for FY21e, to factor in lower cable TV revenue. However, FCF should rise with lower capex.
Asian Pay TV Trust reiterates that 5G data backhaul will be an opportunity and the key component of its broadband business in the next few years.

Our BUY for Asian Pay TV Trust remains premised on a yield of 8.5% and sustainable operating cash flows. Annual FCF of S$45mn is expected to cover dividend payouts of S$18mn, with upside potentially from 5G data backhaul revenue.
We have not modelled 5G in our numbers pending more data points from Asian Pay TV Trust.
See Asian Pay TV Trust Share Price; Asian Pay TV Trust Target Price; Asian Pay TV Trust Analyst Reports; Asian Pay TV Trust Dividend History; Asian Pay TV Trust Announcements; Asian Pay TV Trust Latest News.

Paul Chew Phillip Securities Research | https://www.stocksbnb.com/ 2020-11-16

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