Monday, October 22, 2012

You still think Astro is a good bet?

Just notice where is Astro heading or at least it is also targeting from below's advert? Mobile.

This is not an advert. You wanna click, click the one below :)

Why? Because it is losing viewership in the big screen TV. But, let me ask you, do you seriously believe in watching your show on your Android phone or tablet? Of course, they will say they are targeting multi-platform. True, if you believe it.

Read this, it is talking about how companies like Google, Facebook, Microsoft are still struggling with monetising mobile revenue while more and more people are turning to their little devices for anything - news to games to stocks quotes :). Who are winning at the moment? Apple, Samsung cause they are the devices sellers. In fact, Apple and Google are dominating what Steve Jobs called the post-PC era. The post PC era seems more and more real despite apprehensiveness (even myself). Just that Apple is making money from selling the devices, while Google is giving away its software for free, hoping to get back from adverts and apps. It is actually hard to believe that Samsung has now become the main beneficiary from the handset sales to the extent that the Korean company profited more from it than Google at the moment - until Google found a better model to make more money from mobile adverts that is.

Back to Malaysia, the poor performance in Astro's IPO is not just due to the awareness of the general public in turning their attention to other devices or content, but the price is just too expensive. It is now at RM15 billion, current price of RM2.90 and at its IPO offering price of RM3.00, it was RM15.8 billion. Remember, Astro's profits are dropping. I read with disbelieve when some analysts mentioned of there are still huge untapped potential in the subscription model for Astro because it only manages to penetrate 50% of the households market. There are still remaining 50% to be tapped. Hello...

Other IPOs in Malaysia such as IHH and FGV, they were not real success because we attract good funds. They were successful because Malaysian funds made them a success. Investment is a herd thing until you realise that you are part of the group of bulls that were running aimlessly. (This does not mean I do not believe some of these companies but yet again, expensive is the keyword.)

With more eyeballs to other devices, the momentum swing may be moving towards different players, and it does not mean the incumbents are surely winning. Why take that bet when you are unsure?

Read my article on a more inept view on Astro's IPO.


Malaysia Stock Talk said...

Well, AK already laughing all the way to the bank...

seti88 said...

hi just started reading your blog. Keep up the interesting dissections!

the question know is how low will it go and even if its "nicely priced", will u pick it up now or after election?

felicity said...

Astro is still a well managed company. The challenge which Astro is facing though is a different one. It is now becoming a platform war. TV against any other screens out there.
Additionally, I have doubts over Astro's dominance in the market as it has been a monopoly in PayTV all the while.
Treat it like the dominance of Microsoft and Intel in the PC era. The fact of the matter is that they are still dominating but the industry is not growing.
If you ask me to on the issue of nicely priced, that has to be looked at. At what price is the question. For Astro, it is a never say never but not now yet.