KUALA LUMPUR (Jan 14): CGS-CIMB Research has maintained its "Add" call on Astro Malaysia Holdings Bhd at RM1.28 with an unchanged target price of RM1.75 as it believes that Astro's proactive measures to reinvent itself could grant the group a new earnings growth cycle this coming decade.

In a note dated Jan 13, the research house stated that Astro plans to pilot the addressable advertising programme in second half of 2020 (2H20).

"Essentially, this will let advertisers pick specific demographics or even individuals that they wish to advertise to — just like on YouTube and Facebook. But there is no such thing as a 'skip ad' feature with live TV, which should please advertisers," CGS-CIMB said.

With this, Astro may have the allowance to charge a premium to target certain audience groups and possibly fill more of its advertisement slots in niche programming blocks.

According to the research house, the streaming services are looking to band with Astro to combat piracy and do not see the group becoming collateral damage in the streaming war among studio giants.

"Astro is in talks with more international studios to join its stable of subscription video-on-demand (SVOD) partners, giving Astro a viable proposition to the cord-cutters when the streaming market becomes more fragmented," it said.

CGS-CIMB also noted that international content were what attracted the high-income households to subscribe to Astro back when the pay-TV service first emerged in October 1996 although the group often emphasises that its original ethnic content are its viewership driver.

"Re-rating catalysts for the stock are the return of lapsed subscribers and a stronger ringgit. A key downside risk is a worse-than-expected fall in subscription revenue," it said.

At 9.21am, Astro shares were unchanged at RM1.28, valuing it at RM6.68 billion.