KUALA LUMPUR, July 19 (Bernama) -- The relisting of Astro on Bursa Malaysia will drive a re-rating for the media sector as the company is likely to emerge as the largest media stock by market capitalisation, a research house said.

OSK Research Sdn Bhd said although Astro's long-term prospects appear to be less attractive, the company may be positioned as a dividend play with its highly cash generative local pay-TV business.

"If we were to exclude its overseas operations, Astro is actually a cash cow, chalking up earnings before interest, taxes, depreciation and amortisation of RM800 million to RM1 billion a year and thereby could be positioned as a dividend play," it said in a research note today.

It said Media Prima would benefit the most from the sector's re-rating with it being the closest peer to Astro.

Media Prima is currently the largest free-to-air TV operator in the country, commanding the lion share of viewership at 48 per cent, followed by Astro with a 39 per cent share.

Astro, the dominant pay-TV operator in the country, may face challenges moving forward with the emergence of other pay-TV operators in the form of a cable operator and a few Internet Protocol television (IPTV) players.

Apart from that, escalating cost of content, especially for sports programmes such as the popular Barclays Premier League and slowing subscriber growth, could impede its growth in the future.

Astro expanded pay-TV household penetration from only seven per cent in 2000 to 49 per cent last year.

As at December 2011, it had 3.1 million subscribers.

Astro is slated for relist by end-September.