Astro Malaysia Holdings Bhd continues to demonstrate commendable environmental, social and governance (ESG) credentials, despite some areas needing improvement, according to Maybank Investment Bank Bhd (Maybank IB). The research house has maintained its HOLD call on the company with a discounted cashflow (DCF) target price (TP) of 28 sen.
In its latest assessment, Maybank IB lowered Astro's ESG 2.0 score slightly from 66/100 to 62/100, reflecting updates from the firm's financial year of 2024 (FY24) Sustainability and Corporate Governance Reports.
The research house highlighted that while Astro has made progress in reducing greenhouse gas emissions and resource consumption, the intensity of these resources has been increasing.
The workforce composition is also notable, with women constituting 49% of senior management; however, the representation on the Board of Directors falls short of the 30% threshold recommended by the Malaysian Code on Corporate Governance 2021, as only two of its seven directors are women. Furthermore, the company has room for improvement in appointing more independent non-executive directors, with only three currently serving on the board.
Astro's sustainability efforts are praiseworthy, particularly its ambitious environmental targets. The company aims for a 10% reduction in Scope 1 and 2 emissions by FY26, relative to an FY20 baseline, and a more significant 28% reduction by FY31. Looking further ahead, Astro is targeting carbon neutrality by 2040, with residual emissions to be offset through carbon credits. These initiatives highlight the company's commitment to sustainability, even as Maybank IB suggests areas where ASTRO can further enhance its ESG performance.
As of now, Astro's share price is at 25 sen, and with a 12-month TP of 28 sen, there is a potential upside of 17%. The company has a market capitalisation of approximately RM1.3 billion, with significant shareholders including Krishnan Tatparanandam Ananda, Khazanah Nasional Bhd and Harapan Terus Sdn Bhd. The stock's 52-week range is between 23 sen and 43 sen, indicating some volatility in its trading performance.
