Asian Pay Television Trust:
Stay tuned to a spectacular full-year performance
(Maintain BUY, FV: S$1.04)
On track to delivering its 9.8% yield. APTT’s first set of quarterly results runs parallel to our estimates and its full-year guidance in its prospectus. For the half-year ending 30 June 2013, APTT recorded overall revenues of S$154.1mil, comprising 49.6% of its FY2013 guidance of S$310.8mil.
Accompanying its results, APTT announced its DPU of 4.8c for the period ended 30 June, which is payable on 24 September 2013. APTT also reaffirmed its second-half DPU of 4.13c, in line with our full-year forecast of 9.0c.
Premium digital cable TV growth roaring ahead. Unsurprisingly, Premium digital cable TV was the growth outperformer, delivering both higher-than-projected average revenue per user (ARPU) and subscriber growth. As at 30 June 2013, APTT’s seed asset Taiwan Broadband Communications (TBC) has a total of 118,000 Premium digital cable TV subscribers with a monthly ARPU of NTD209, notably ahead of its forecast ARPU of NTD202.
Riding on the digitization wave. We remain highly optimistic on the growth prospects of Premium digital cable TV and raise our FY2013 growth forecast for Premium digital cable TV subscribers from 8% to 10%. Growth drivers underpinning our optimism include TBC’s free promotional set-top box initiative, growing demand for a high-definition viewing experience and increased availability of digital content. According to APTT, TBC is well on track towards achieving its 40% digital set-top box penetration goal by end-2013 and over 50% by end-2014.
Broadband growth lagging slightly behind projections. TBC’s growth in broadband subscribers and ARPU paled in comparison, with subscriber growth coming in at 2.3% and monthly ARPU at NTD547. This compares less favorably to APTT’s projections of 7.4% broadband subscriber growth in FY2013 and ARPU of NTD557. Nonetheless, we do not perceive this as a cause for concern and believe that TBC’s ongoing cross-selling and up-selling initiatives will prove supportive of its broadband revenue growth in 2H13.
Reiterate BUY on fair value of S$1.04. We reiterate our BUY call on APTT with an unchanged fair value of S$1.04. Since our initiation on 30 July 2013, APTT is up by 3.4%, leaving an additional capital upside of 14.3% to our target price. This comes on top of its alluring 9.8% yield - a street-high among S-REITs and business trusts.
Publish date: 14/08/13