-->

Asian Pay Television Trust - Phillip Securities 2022-05-17: Broadband Growth Keeps Revenue Stable

ASIAN PAY TELEVISION TRUST (SGX:S7OU) | SGinvestors.io ASIAN PAY TELEVISION TRUST (SGX:S7OU)

Asian Pay Television Trust - Broadband Growth Keeps Revenue Stable

  • Asian Pay TV Trust (SGX:S7OU)'s 1Q22 results met our expectations. Revenue and EBITDA were at 25%/24% of our FY22e estimates. No change to the quarterly distribution of 0.25 cents per unit.
  • Broadband revenue rose 16% y-o-y to around $16mil. Growth is supported by expansion in subscribers (+13%) and expansion in ARPU (+5%).
  • No change to our ACCUMULATE recommendation and FY22e forecast. Asian Pay TV Trust pays an attractive dividend yield of 7.5% well supported by cash flows.



The Positive


Broadband growth from higher prices and subscribers.

  • Broadband added 7,000 subscribers (1Q21: +5000), while ARPU rose 5% y-o-y to TWD373. ARPU has expanded q-o-q for the fourth consecutive month. Higher speed broadband plans of 300Mbps to 1Gbps are driving the rise in ARPU. Only 40% of its cable TV subscriber use Asian Pay TV Trust broadband.


The Negative


Non-subscription cable TV revenue at a record low.

  • Basic cable TV declined 5% y-o-y to S$54.7mil. The largest contraction was from the 10% drop in non-subscription revenue to S$7.5mil. Leasing channels to third parties (e.g. home shopping networks) is expected to deteriorate further as households shift their spending towards online shopping.


Outlook

  • We believe higher interest rates will not impact the ability to sustain dividends. From the S$1.5bn debt outstanding, around S$1bn has interest rates fixed or swapped to a fixed rate of 0.89%. The more expensive S$160mil Singapore dollar offshore loans bear an interest of 2.6%.
  • We expect S$60mil of the loan to be pared down from the current $127mil cash holdings. The remaining S$300mil unhedged offshore loans will be partially hedged. Assuming a 1% rise in interest for unhedged S$500mil loans, increment interest is S$5mil.
  • There is sufficient buffer from S$80mil annual FCF to cover the $18mil dividend. Asian Pay TV Trust aims to lower current net debt to EBITDA of 7.4x to 5x-6x to lower borrowing costs.

Maintain ACCUMULATE with an unchanged target price of S$0.15






Paul Chew Phillip Securities Research | https://www.stocksbnb.com/ 2022-05-17
SGX Stock Analyst Report ACCUMULATE MAINTAIN ACCUMULATE 0.150 SAME 0.150



Advertisement



MOST TALKED ABOUT STOCKS / REITS OF THE WEEK



loading.......



ANALYSTS SAY


loading.......