Asian Pay Television Trust - Phillip Securities 2022-03-08: 7% Yield Is Well Supported

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ASIAN PAY TELEVISION TRUST (SGX:S7OU)

Asian Pay Television Trust - 7% Yield Is Well Supported

• Asian Pay TV Trust (SGX:S7OU)'s FY21 results met our expectations. Revenue and EBITDA at 99%/103% of our FY21 forecasts. Quarterly dividend of 0.25 cents is maintained.
• 4Q21 free cash-flows remain stable at S$24mil. Cash-flows well support the quarterly dividend payout of S$4.5mil or dividend yield of 7.4%.
• We leave our FY22e unchanged. The target price of S$0.15 is maintained at 9x FY21e EV/EBITDA are a 20% discount to Taiwanese peers on account of its smaller scale and higher leverage. Our ACCUMULATE recommendation is maintained.
• Asian Pay TV Trust's free cash-flows of around S$80mil p.a. are sufficient to cover annual dividends of S$18mil. Excess cash will be used to repay loans. Cash-flows are supported by growth in broadband revenue and stable capital expenditure.

The Positives

Broadband ARPU and subscriber numbers expanded.

• Net adds for broadband rose by 8,000 subscribers (4Q20: +2000). This is a major turnaround from a year ago.
• ARPU rose around 4% y-o-y to NT$369. This is also the third consecutive q-o-q expansion in ARPU. The reason for the growth has been higher speed plans of 300Mbps to 1Gbps that the wireless operators (Far EasTone and Taiwan Mobile) are successfully signing up.

FCF grew.

• Asian Pay TV Trust's free cash-flows rose S$8.2mil to $24mil. The jump was due to improvement in EBITDA (+S$3mil) and lower CAPEX (+S$5mil).

The Negative

Higher interest expense expected.

• The interest rate hedges for the onshore debt of around NT$28bn (S$1.35bn) expire on 31Dec21. Hedges will be placed this year to lock-in rates for another two to three years until the 2025 refinancing. A 20 bps rise will increase interest expense by around S$2.7mil.

Outlook

• The growth in broadband revenue is close to replacing weakness in cable TV. Higher interest rates in FY22 will be offset by lower content costs. The upside catalyst will be maiden revenues from 5G data backhaul from mobile operators.

Maintain ACCUMULATE with an unchanged target price of S$0.15

• Asian Pay TV Trust pays an attractive dividend yield of 7.4% well supported by cash flows.
• See
  • Asian Pay TV Trust's Share Price,
  • Asian Pay TV Trust's Target Price,
  • Asian Pay TV Trust's Analyst Reports,
  • Asian Pay TV Trust's Dividend History,
  • Asian Pay TV Trust's Announcements,
  • Asian Pay TV Trust's Latest News.

Paul Chew Phillip Securities Research | https://www.stocksbnb.com/ 2022-03-08

SGX Stock Analyst Report ACCUMULATE MAINTAIN ACCUMULATE 0.150 SAME 0.150