This came after Astro’s results for 2Q25 ended July 31 beat expectations with a core net profit of RM26.7mil and a surprise 2% rise in TV-subscription revenue quarter-on-quarter after five consecutive quarters of decline.

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Astro’s six-month (1H25) core net profit hit RM51.7mil, down 51% year-on-year and the company reviewed its dividend policy from a quarterly payout to an annual one.

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CGS International Research (CGSI Research), however, said Astro’s core earnings for 2Q25 fell short of its expectations while cost-saving measures were taking longer than expected to filter through.

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One positive factor was the average monthly revenue per user (Arpu) rising to RM99.80 in 2Q25, driven by active bundling and up-selling strategies, the research house said.

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It added the media concern will be rolling out three new packages over the next few months with improved content offerings to cater to changing consumer preferences and to simplify package-choice considerations.

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CGSI Research cut its financial year 2025 (FY25), FY26 and FY27 core net profit forecasts for the media company by 48%, 40%, and 21%, respectively, to factor in weaker advertising expenditure (adex) and higher operating expenditure and taxes, although this would be partially offset by the stronger ringgit.

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“All of Astro’s revenues are denominated in the ringgit, while we estimate that about 35% of its total costs are in US dollars, comprising mainly a portion of its content costs, transponder leases and software-related expenses.

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“As such, the company stands to benefit from the recent ringgit strength, albeit with a lag as it hedges the bulk of its US dollar-related costs on a 12-month rolling basis,” the research house said.

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The research house retained its “add” call on Astro with a target price of 41 sen a share, noting that while headwinds persist given the downtrend in Astro’s Pay-TV subscriber base, its efforts to innovate and offer services with better value propositions and cost optimisation, is starting to bear fruit.

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Hong Leong Investment Bank Research meanwhile retained its “sell” call on Astro with a lower TP of 22 sen a share, as it believes the company’s move to rejig its package offerings to attract subscribers would come at the expense of Arpu despite leading to an increase in customer acquisition.

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“We view the outlook may still be hampered by softening adex and weakening subscription.

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“Looking ahead, the structural substitution by consumers to other streaming services is expected to persist,” the research house stated.