Astro Malaysia Holdings Bhd (AMH) has announced it will cease operations of its "Go Shop" platform, effective October 11, 2023, after eight years of operation. This decision comes in response to a challenging economic landscape and notable changes in consumer shopping behavior.
The "Go Shop" platform, operated by Astro GS Shop Sdn Bhd (AGSS), a joint venture between Astro Retail Ventures Sdn Bhd, a wholly owned subsidiary of AMH, and Korean partner GS Retail Co Ltd (GSR), is set to permanently close its doors next week. The joint venture was structured with a 60% equity interest held by Astro Retail Ventures and the remaining 40% held by GSR.
This move forms part of an ongoing strategic realignment within Astro, including the implementation of significant cost-saving measures. The company noted a significant downturn in home shopping since the onset of the pandemic. The closure is intended to ensure that Astro's resources are focused on business lines that contribute the most to overall operations.
According to InvestingPro data, AMH has a market cap of 13.93B USD and a P/E ratio of 33.93, with the company's revenue for LTM2023.Q2 standing at 1565.8M USD. The company has also seen a revenue growth of 12.19% for the same period. Despite the closure of the "Go Shop" platform, AMH's financial health seems to be in a good state with a gross profit of 848.57M USD.
In a statement released on Monday, AMH stated, "Go Shop is not considered a material subsidiary of AMH and is not expected to have a material effect on the group’s consolidated earnings per share, net assets per share, or gearing for FY24." This aligns with InvestingPro Tips which indicates that AMH has high earnings quality, with free cash flow exceeding net income, and is expected to be profitable this year.
In the same announcement, Astro Malaysia Holdings Bhd expressed gratitude towards the Go Shop team for their passion and dedication to the platform over the years. The company also thanked customers for their continued support throughout Go Shop's years of operation. For those interested in further insights and tips, InvestingPro offers additional tips for AMH and other companies.
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