KUALA LUMPUR: Astro Holdings Bhd's outlook is likely to remain clouded despite moves to rationalise their product offerings to gain more customers.
Hong Leong Investment Bank Bhd (HLIB) said while simper package offerings could increase customer's traction, it thinks it will also reduce the group's average revenue per user (ARPU).
At this juncture, Astro has more than 15 package offerings, which have worked to confuse customers and hamper customer acquisition.
Moving forward, the group is looking to rejig its package offering to three different options with the lowest tier package to come on par with the most over-the-top (OTT) offerings at RM40-50.
"Despite its expertise in local content production, we view that the outlook may still be hampered by the major hurdle of softening advertising expenditure and weakening subscription," it said.
Note that subscription revenue has been the main revenue driver for Astro making up about 62-77 per cent of top-line for the past five financial years.
Astro's subscriptions fell 21 per cent per cent quarter-on-quarter and 12 per cent year-on-year for the first quarter ended April 30, 2024 to RM86.7 million.
HLIB maintains its sell call on Astro, with a target price of 23 sen a share.