Asian Pay TV

Asian Pay TV: JP Morgan initiates with O/w, TP $0.90. House note that APT is a leading cable TV operator offering stable growth with yield of 10% in 2012-2015 on the back of a 3.6% CAGR for asset EBITDA and 12% CAGR for earnings. Yield looks sustainable in a fair assessment of rezoning risk, believe: 1) 2013/2014 distribution guidance is firmly committed; 2) competition from smaller operators will be contained due to capex barriers, content constraints, and customers’ choices of a range of factors over purely pricing (a typical example is PCCW vs. i-cable in HK); and 3) believe APTT will not take rezoning steps in other regions due to a lack of return. Valuation compelling; dividend payment in Oct a potential catalyst.