KUALA LUMPUR: Astro Malaysia Holdings Bhd is set to benefit greatly from the passing of the Copyright (Amendment) Act 2022, as it allows the pay-TV operator to address piracy and take action against sellers of illegal streaming devices.

       Maybank Investment Bank (Maybank IB) in a report, said content piracy has been plaguing Astro over the past six years.

       “The Copyright (Amendment) Act 2022 now explicitly recognises streaming technology as an avenue to infringe copyright. A reading of Section 43AA implies that e-commerce and social media platforms that openly sell illegal streaming devices (colloquially known as TV boxes), are likely guilty of infringing copyright.

       “A February 2019 YouGov poll found that 87% of Malaysian TV box owners purchased them from e-commerce and social media platforms.”

       With the passing of the Act, Maybank IB said Astro can now take action against TV box vendors.

       “Section 51B implies that Astro, as a copyright owner, can ‘test’ purchase TV boxes to determine if anyone is infringing its copyright and take legal action against suspected offenders.”

       However, the research house said Section 41A (2) of the Act implied that offenders may avoid prosecution if they made a written offer to settle with the relevant authorities.

       “The related safeguard is that the written consent of the Public Prosecutor, also known as the Attorney General, must be sought before issuing the aforesaid written offer.”

       In spite of the passing of the Act, Maybank IB said it is maintaining its earnings forecast and target price of RM1.36 for now.

       “Given that the act is new and yet to be tested in court, we maintain our earnings estimates and target price, which are premised on Astro’s TV subscription revenue inching up between 1% and 2% per annum after falling 30% over the last six years.

       “We also note that churn rates may remain high not only due to content piracy, but currently fragile consumer sentiment due to purchasing power being eroded by rising inflation. Yet, this sct could be a very positive inflection point for Astro.”

       Astro posted a 20% quarter-on-quarter (q-o-q) jump in net profit to RM127mil for its fourth quarter of the financial year ended Jan 31, 2022, after taking into account the impact of “Cukai Makmur” (Prosperity Tax) in the financial year of 2022.

       In a note on its fourth quarter earnings, the group pointed out that advertising expenditure had increased 56% q-o-q to RM146mil, lifted by economic recovery and the resumption of signature productions.

       Revenue was 1% higher q-o-q to RM1.03bil. The group also has declared a fourth interim dividend of 1.5 sen per share and proposed a final dividend of 0.75 sen per share.

       This brought its full-year dividend to 6.75 sen per share.