KUALA LUMPUR (Dec 5): Shares in Astro Malaysia Holdings Bhd gained 2.21% this morning after the pay-TV operator posted an 11.5% rise in net profit to RM170.85 million or 3.28 sen per share in its third quarter ended Oct 31, 2019 from RM153.22 million or 2.94 sen per share last year, owing to lower net finance charges and tax expenses.

At 9.35am, Astro added 3 sen to RM1.39, valuing it at RM7.25 billion.

Revenue, however, declined 12.18% to RM1.22 billion from RM1.38 billion, amid a decrease in subscription revenue, production revenue, sales of programming rights and advertising revenue.

The group declared a third interim dividend of two sen per share for the financial year ending Jan 31, 2020, payable on Jan 3.

RHB Investment Bank Bhd maintained its “Buy” rating on Astro Malaysia Holdings Bhd at RM1.36 with a higher target price of RM1.93 (from RM1.85) and said Astro’s 9MFY20 (Jan) results trumped house/consensus expectations on larger-than-expected opex efficiencies.

In a note today, RHB IB lifted Astro’s FY20, FY21 and FY22F core earnings by 14%, 5.2%, and 6.2% after factoring in stronger opex gains, and roll over forecast base year to FY21.

“We continue to like Astro for its positive commercial execution, strong cash generation and attractive dividend yields.

“Downside risks are weaker-than-expected earnings and margins,” it said.