Analysts positive on Astro’s partnership with iQIYI

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Astro and iQIYI has just launched iQIYI App, making Malaysia the first market outside China to experience this leading premium entertainment service. — Reuters photo

KUCHING: Astro Malaysia Holdings Bhd’s (Astro) partnership with iQIYI has garnered positive reactions but this may not translate too meaningfully to group earnings in the near-term.

Astro and iQIYI has just launched iQIYI App, making Malaysia the first market outside China to experience this leading premium entertainment service, as revealed in Astro’s press release.

“Overall, we are positive with this high profile tie-in as the revenue-sharing deal provides a new income stream that we believe come at a minimal cost,” the research arm of Kenanga Investment Bank Bhd (Kenanga Research) said.

“In addition to providing a wider array of Chinese language content for its customers, the collaboration also means sharing of selected Astro’s own contents to iQIYI’s library, and potential cross-platform opportunities for its talents.

“Management is also hopeful to glean more knowledge on artificial intelligence and data analytics through iQIYI’s expertise.”

Kenanga Research recapped that management aspires to bring in about 100,000 new subscribers into the iQIYI platform.

The research arm noted that assuming this is achieved, the group could see revenue increments of circa RM20 million to RM30 million per year (less than one per cent of total group revenue).

“In the near-term, this may not translate too meaningfully to group earnings. However, the potential abovementioned synergies could grow the group operationally when doors for other similar partnership opportunities arise.”