Thursday, August 22, 2013

Asian Pay Television Trust : Steering a steady course (CIMB)

Asian Pay Television Trust
Current S$0.88
Target S$1.00
Steering a steady course

 APTT reported results for the stub period of 32 days from listing to 30 June with no surprises. Its continued steadydelivery of dividends will help build a track record and should lead to yield compression inthe medium-term.

1HFY13 EBITDA was 50% of our full year forecast and in line. A distribution of 4.8 Scts per unit was declared and guidance of 4.13 Scts per unit was affirmed for 2HFY13. We reiterate our Outperform rating and DDM-based (COE 11.2%, LTG 1%) target price. We expect that the stabilisation in the Singapore yield environment and establishment of a track record for dividend payments will catalyse the units.

All key statistics in line
1HFY13 revenue and asset EBITDA both represented 50% of our full-year forecasts and therefore in line with expectations as 2H is typically mildly stronger seasonally. The 1HFY13 basic cable and broadband net adds were slightly lower than expectations, at 19% and 31% respectively, of our full-year forecasts. However, this was offset by 1HFY13 premium digital cable TV net adds accounting for 85% of our full-year estimate. ARPU was in line or above forecasts except for broadband ARPU, which was 2% below expectations. Management indicated that it would promote higher speed broadband packages in 2HFY13, which would likely provide support for ARPU.

Profitability affirmed
Asset EBITDA was S$99.6m and EBITDA margin was 64.6%, or 0.6% pt higher than FY12 (1HFY12 comparative figures are not available) and in line with our full-year forecast of 64.5%.

Organic growth
Management reaffirmed its strategy to grow distributions by focusing on upselling to premium digital cable and broadband customers, as well as by rolling out digital set-top boxes. Although new zone licenses have been issued in Taichung, management continues to explain that competition will remain benign in the foreseeable future and they are cautious of any inorganic expansion requiring higher capex.

Revenueon track to achieveour FY13 forecast, expect slightly stronger 2HFY13
1HFY13 revenue of S$154.1m was in line, accounting for 50% of our full-year forecast. No comparative yoy figures were provided. However, management reaffirmed its full-year targets that are in line with our forecasts.
The basic cable and broadband subscriber growth was slower in 1HFY13. However, there is a slight seasonal uptick in 2H from “back-to-school” demand and we see no reason to change our forecasts at this stage. Similarly, broadband ARPU, which was slightly lower in 1HFY13, is expected to improve in 2HFY13 as families return from their summer holidays.

We have attempted to calculate a momentum indicator, based on the company’s revenue performance since listing (period from 30 May- 30 Jun) compared to the pre-listing period (period from 1 Jan- 29 May). While some seasonality is expected due to the Chinese New Year, revenue momentum appears to be positive.

Operating costs within target
Operating costs (excluding depreciation and management fees) were 35.4% of sales, which was slightly lower than our FY13 forecast of 35.6% but the quantum was in line at 49% of our full-year forecast. Other operating costs were 7.6% of sales, which was 0.3% pt lower than our 7.9% forecast for FY13.

The asset EBITDA margin was 64.6%, which was 0.6% pt higher than FY12 (1HFY12 figures were not available for comparison) and slightly above our 64.5% forecast for FY13. The asset EBITDA of S$99.6m was also 50% of our full-year target.

Source/Extract/Excerpts/来源/转贴/摘录: CIMB-Research,
Publish date: 20/09/13

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