Date and Broker Information

Date: October 27, 2024
Broker: Maybank Investment Bank Berhad

Company Overview

Astro Malaysia (ASTRO MK) is an integrated consumer media entertainment group in Malaysia, with operations spanning Pay-TV, Radio, Publications, and Digital Media. The company is the largest Pay-TV operator in Malaysia, boasting approximately 5.3 million subscribers, which includes both Pay-TV and subscription-free viewers (NJOI). The penetration rate for Pay-TV in Malaysia is at 65%, and the company aims to grow by upgrading NJOI viewers to Pay-TV subscribers.

ESG Credentials

Astro Malaysia has made significant strides in its Environmental, Social, and Governance (ESG) initiatives, although there are areas for improvement:

• Environmental (E): The company has successfully reduced greenhouse gas emissions, energy consumption, and water consumption. However, the intensity of resource consumption has been rising, indicating a need for ongoing improvement in this area.
• Social (S): Women are well represented in ASTRO’s workforce and senior management, with figures at 49% and 50%, respectively, as of FY1/24. Despite this, the representation of women on the Board of Directors is less than the prescribed 30%, with only 2 of 7 directors being women.
• Governance (G): The company needs to appoint more independent non-executive directors. Currently, only 3 of its 7 directors (43%) are independent non-executive directors (INED), which falls short of the Malaysian Code on Corporate Governance’s recommendations.

ESG Score

The ESG score for Astro Malaysia has been updated to 62/100, which is above average, down from 66/100. This score reflects the company’s commitment to improving its sustainability practices and achieving its environmental targets.

ESG Targets

Astro Malaysia has set commendable mid- to long-term ESG targets:

• A 10% reduction in Scope 1 and 2 emissions by FY26, using FY20 as the baseline.
• A 28% reduction in emissions by FY31, also based on FY20.
• The company aims to achieve carbon neutrality by 2040, offsetting residual emissions through carbon credits.

Financial Performance

Astro Malaysia’s financial metrics show challenges:

• Revenue for FY24 is projected to be MYR 3,343 million, down from MYR 3,617 million in FY23, reflecting a year-on-year decline.
• Core net profit is expected to decrease significantly, highlighting the financial pressures the company is facing in the current market.

Conclusion

Despite facing operational challenges and the need for improvement in certain areas of governance, Astro Malaysia is making commendable progress in its ESG initiatives and targets. The company remains focused on leveraging its subscriber base while enhancing its sustainability practices to secure a resilient future in the media industry.