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PHILLIP Capital has downgraded Asian Pay Television Trust (APTT) to "accumulate" due to the price appreciation of its shares amid no change in the company's fundamentals.
The research house added that the trust's dividend yield is attractive and sustainable while its operating cash-flows are supported by recurrent monthly cable TV subscription fees.
The trust's management has guided a 6.5 Singapore cents distribution per unit for FY2018 - this is unchanged from FY2017, but it still represents a 10.7 per cent dividend yield, it pointed out.
In addition, cable subscribers were stable and churn remains low at 0.7 per cent. Capital expenditure will decline from S$80 million in FY2017 to S$45 million in FY2018 as the lumpy analogue switch-off ends this year.
On the other hand, ARPU (average revenue per user) remains sluggish with it recording declines quarter on quarter across all three business segments - pay-TV, broadband and premium TV.
In terms of outlook, the house said that it remains stable.
"We shaved our FY2017 earnings estimates by 15 per cent due to higher FX loss and higher effective tax. As we enter 2018, cash flows should improve as capex for premium digital ends," it added