Asian Pay TV

Asian Pay TV: CIMB initiates Coverage with O/p call and $1.00 TP. note that although its post-IPO performance has lagged behind, APTT is still set to deliver a stable dividend pay-out due to its defensive utility-like Taiwan cable TV business. As growth weakens across Asia, a high and stable dividend yield should remain attractive. House remain unconcerned about new licence approvals as a capital-intensive build out suggests new competition is not a credible threat. While bond yields have ticked upwards, rates in Taiwan are expected to remain low for some time, keeping financing costs low. Add that since listing, QE tapering and spiking SGlong bond yields have caused yield plays to weaken considerably. However, stabilising SG bond yields and the stable Taiwan rate outlook mean APTT’s high yields remain attractive, in house view. TP indicates a CY14 yield of 8.2%, still a discount of 180bp to S-REITs and a 410bp discount to pay TV-related names.