Asian Pay Television Trust - Phillip Securities 2021-03-08: 9.3% Yield While Waiting For 5G

ASIAN PAY TELEVISION TRUST (SGX:S7OU)

Asian Pay Television Trust - 9.3% Yield While Waiting For 5G

Asian Pay TV Trust's 4Q20 revenue and EBITDA were within expectations, at 101%/99% of our FY20 forecasts.
4Q20 cable subscribers contracted 7,000 q-o-q to 716,000. But ARPU was stable at NT$482.
FY20 capex was down 29% to S$51mn, bumping up adjusted FCF by S$21mn to a record S$67mn.
FCF of S$67mn to support DPU of S$0.01 for 9.3% prospective yields. 5G data backhaul still seen as a multi-year revenue opportunity. DPU of S$0.0025 per quarter will be maintained in FY21.
Our forecasts are largely unchanged.

FY20 adjusted FCF rose S$29mn to S$67mn. EBITDA inched up to S$180mn but the largest improvement was a 29% or S$21m drop in capex. This is expected to provide ample cover for S$18mn of annual dividend payouts and to pare down debt.

Cable TV is its largest division, at 64% of revenue. Cable TV revenue expanded modestly by 2% y-o-y to S$195mn, aided by a 6.1% appreciation of the Taiwan dollar in FY20. 4Q20 subscriber churns were the largest in eight quarters. We think affordable cable prices of NT$482 or S$23 for 100 channels should still provide some downside support.

Stable operating cash flows are expected to sustain quarterly dividends. Growth is anticipated from 5G data backhaul to mobile operators in Taiwan. No guidance has been provided but we expect a 14,000 fall in cable-TV subscribers in FY21e to be offset by a 15,000 increase in broadband subscribers.

Our forecasts are largely unchanged. Maintain BUY on Asian Pay TV Trust and target price of S$0.15. Set at 9x EV/EBITDA, a 20% discount to Taiwanese peers given the smaller scale, higher leverage and softer growth profile.
Yields of 9.3% are attractive, paid quarterly and well supported by FCF.
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/ 2021-03-08

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