KUALA LUMPUR: RHB Research has maintained its "buy" recommendation and target price of RM1.48 on Astro Malaysia Bhd on the back of its 1QFY22 earnings, which benefited from a recovery in advertising expenditure.

       The group's 1QFY21 core earnings fell 4.3% quarter-on-quarter (q-o-q) to RM147.2mil, which was 24% and 27% of RHB's and consensus full-year estimates as stronger Ebitda was offset by higher financing cost.

       While subscription revenue slipped due to Covid and MCO2.0, adex revenue grew at the fastest pace since 4QFY19.

       RHB expects adex headwinds in 2QFY22 with MCO3.0 delaying production shoots, on-the-ground activities and sponsorships.

       Astro is capitalising on the pandemic by selling consumer essentials and fresh food, it added.

       Moving forward, Astro is trialling a plug and play version of the new set-top box.

       The new version which allows for a direct broadband connection and overcomes the rain fade issue synonymous with its satellite service, ahead of a July lauch.

       "There is good cost savings potential in the long run, as it saves on subscriber acquisition and installations with the STB shipped directly to customers," said RHB.

       Meanwhile, the take-up of Astro's new independent over-the-top service is ahead of internal expectations, it added.