Starhub *Official* (SGX: CC3)

[simon_84]

Is starhub worth to invest in now?

Based on price trend over the years ?
No.
Still holding on some to remind me of poor price entry during 2015.

 

[Shion]

StarHub's latest acquisition is a game changer in the telco industry​

https://www.theedgesingapore.com/ca...atest-acquisition-game-changer-telco-industry
On Sept 22, StarHub proposed its acquisition of a 50.1% interest in MyRepublic’s broadband business in Singapore.

StarHub’s total investment will be up to $162.8 million. An initial consideration of $70.8 million will be paid by StarHub for 50.1% of the shares in the new entity, MyRepublic Broadband, while a deferred consideration of up to $92 million will be paid if future financial performance matrices are met. In addition to equity, StarHub has agreed to refinance $74.2 million of debt for MyRepublic for a period of three years.

MyRepublic will retain the remaining 49.9% stake and its senior management team, helmed by co-founder and CEO Malcolm Rodrigues.

Upon successful acquisition, StarHub’s market share in Singapore’s broadband market will increase by 6% to 40%, trailing slightly behind market leader Singtel at 43%.

What was once a highly competitive landscape, is now moving towards more open collaborations.

“The deal marks the first consolidation of its kind in over a decade, and is in line with management’s narrative on M&A,” says RHB Group Research, who is overall positive on the acquisition as it would strengthen StarHub’s position in the fibre broadband market; and unlock scale and synergies via joint go-to-market opportunities, wholesale offerings, and cost savings.

Revenue synergies are expected in the form of the extension of connectivity services, cloud gaming, and over-the-top services to MyRepublic, with StarHub benefiting from MyRepublic’s approximately 6,000 enterprise customer base and regional footprint. StarHub would also be able to offer broadband network services to MyRepublic as a wholesale provider via Nucleus Connect.

To that end, StarHub’s management does not rule out other collaborations or partnerships, including for mobile, with MyRepublic currently its mobile virtual network operator.

RHB has a “neutral” call on StarHub with a target price of $1.35.

Similarly, UOB Kay Hian has kept its “hold” call on StarHub with a target price of $1.30 and entry price of $1.15.

“The transaction is priced at 8 times EV/EBITDA, which we deem as fair given its controlling stake. There is a 3% earnings enhancement upon completion of the deal. Overall, the deal is fair as StarHub aims to drive its broadband market share to 40% with the acquisition,” says analyst Chong Lee Len, who also likes the stock for its sustainable dividend yield of 4.8% for FY2022.

On the other hand, CGS-CIMB has a more positive outlook on the stock as it keeps its “add” call on StarHub with a target price of $1.65.

Analyst Foong Choong Chen sees this deal as a “win-win situation” for both parties.

“Based on MyRepublic’s FY2021 net profit (pre-synergies), we estimate the deal will enhance StarHub’s FY2022 core EPS by 4.6%, after considering the interest income foregone on the cash to fund the initial consideration (and ignoring the net interest income from the loan to MyRepublic). StarHub’s net debt/EBITDA would rise marginally from 1.32 times to 1.41 times post-deal, excluding the loan to be extended to MyRepublic,” says Foong.

Meanwhile, the analyst believes that there could be more synergies apart from the broadband segment. “In terms of revenue synergies, StarHub will be able to sell its growing range of connectivity, over-the-top content, cloud gaming and other services into MyRepublic’s subs base, while there will likely be wholesale business opportunities too. There is also the potential to work with the MyRepublic Group to offer solutions to its enterprise clients in Singapore and in the region. As for cost synergies, StarHub highlighted joint go-to market opportunities, as well as infrastructure and resource rationalisation,” he adds.

DBS Group Research too has a “buy” recommendation on StarHub with an increased target price of $1.44.

The way analyst Sachin Mittal sees it, this acquisition may be small, but it will still be accretive and will help boost StarHub’s earnings to enter a sustainable growth territory in FY2022. “We expect StarHub to register mid-single-digit earnings from FY2022 onwards, thanks to recovery from the pandemic in FY2022, reversing five years of declining earnings from mobile services, and potential mobile sector consolidation in 2022, thus reviving long-term growth of the mobile business. Meanwhile, enterprise business should continue to grow, led by Cybersecurity & regional ICT services,” says Mittal.

To that end, Mittal believes that StarHub will likely retain its stake in MyRepublic at 50.1% and not dig in to the 49.9% currently still held by MyRepublic, as the remaining stake can be bought by StarHub subject to undisclosed stringent conditions.

“We think that StarHub might keep its ownership in MyRepublic’s broadband at 50.1% and not pursue the remainder stake as StarHub is already in a position to control the business and MyRepublic might want to retain the 49.9% stake in the business which might benefit from cross-selling of new products from StarHub,” says Mittal.

As at 3.45pm, shares in StarHub are trading at $1.27, giving it a FY2021 price-to-earnings ratio of 15.8 times and a dividend yield of 4.1%, according to RHB’s estimates.

 

[Shion]

StarHub kept at 'neutral' as it removes potential disrupter at a price: PhillipCapital​

https://www.theedgesingapore.com/ca...oves-potential-disrupter-price-phillipcapital
PhillipCapital is keeping its “neutral” call on StarHub with a target price of $1.24, following StarHub’s acquisition of a 50.1% stake in MyRepublic’s Singapore Broadband business.

StarHub’s total investment will be up to $162.8 million. An initial consideration of $70.8 million will be paid by StarHub for 50.1% of the shares in the new entity, MyRepublic Broadband, while a deferred consideration of up to $92 million will be paid if future financial performance matrices are met. In addition to equity, StarHub has agreed to refinance $74.2 million of debt for MyRepublic for a period of three years.

MyRepublic will retain the remaining 49.9% stake and its senior management team, helmed by co-founder and CEO Malcolm Rodrigues.

Upon successful acquisition, StarHub’s market share in Singapore’s broadband market will increase by 6% to 40%, trailing slightly behind market leader Singtel at 43%. According to analyst Paul Chew, “The transaction will further consolidate the market into effectively two major operators with at least 80% share. Another benefit is the possible avoidance of a better funded shareholder of MyRepublic that could price disrupt the market.”

Chew is also positive on this deal as the cost synergies will come from sharing of network infrastructure cost and capital expenditure. StarHub can drive more products such as cloud computing and OTT into MyRepublic’s higher ARPU consumer customer base. MyRepublic also has SME customers where StarHub’s enterprise solution may become an attractive value add.

Overall, the analyst sees this deal as a financially accretive acquisition, as he believes that the acquisition will raise StarHub historical FY2020 EPS by 3.8% to almost 9 cents. EBITDA will also improve by around 3.3%.

However, the deal does not seem entirely cheap. “The historical EV/EBITDA and PE ratio of the acquisition are 8.0 times and 13.8 times respectively. It is above our target valuations of StarHub but considered fair once the potential synergies materialise,” says Chew.

Furthermore, there are some risks to this transaction, as it includes a $74.2 million loan to MyRepublic backed by an undisclosed security packages and interest-bearing.

As at 11.00am, shares in StarHub are trading at $1.24 or 20.1 times FY2021 earnings with a dividend yield of 4.0%.

 

[RexxarLoh]

Based on price trend over the years ?
No.
Still holding on some to remind me of poor price entry during 2015.

I see. Thanks for the advice. My friend ask me not to buy last year also.

 

[Shion]

StarHub posts 9.5% lower earnings of $40.2 mil in 3QFY21​

https://www.theedgesingapore.com/capital/results/starhub-posts-95-lower-earnings-402-mil-3qfy21
StarHub has reported earnings of $40.2 million for the 3QFY2021 ended September, down 9.5% y-o-y.

This brings net profit to $108.2 million for the 9MFY2021, 11.2% lower y-o-y.

Excluding the effects of payouts for the jobs support scheme (JSS), net profit after tax attributable to shareholders (or earnings) increased 5.1% y-o-y to $40.0 million.

StarHub’s 9MFY2021 earnings – excluding JSS – rose 6.0% to $107.4 million.

3QFY2021 revenue improved 5.6% y-o-y to $517.2 million, while 9MFY2021 revenue rose 2.9% y-o-y to $1.49 billion.

Segmentally, the telco saw lower mobile and entertainment revenue, while it registered increases in revenues for the broadband and enterprise segments.

In the 3QFY2021, mobile saw revenue of $133.3 million, down 0.6% y-o-y. Entertainment revenue fell 4.6% y-o-y to $45.0 million.

Meanwhile, broadband revenue rose 9.5% y-o-y to $49.8 million. Enterprise revenue was up 17.3% y-o-y to $190.0 million.

Network solutions in the 3QFY2021 fell 8.6% y-o-y to $90.1 million mainly due to lower revenues from data & internet and voice services.

Cybersecurity services rose 73.1% y-o-y to $79.3 million on stronger business demand.

Regional ICT services rose 16.5% y-o-y to $20.6 million; the FY2021 marks the first full year of the consolidation of Strateq.

At the same time, StarHub has increased its EBITDA margin guidance for the FY2021 to at least 26%, higher than the original 24% to 26% range.

This is due to the postponement of operating expenditure relating to the IT transformation programme and higher contributions expected from cybersecurity services.

In addition, StarHub expects to achieve “significant” operating expenditure reductions for the year due to its disciplined approach to expenditure and cost optimization initiatives.

As at Sept 30, StarHub has free cash flow of $348.6 million and a lower net debt to EBITDA of 1.27 times.

“We continue to see top- and bottom-line growth in 3QFY2021, following the strong numbers recorded [in] the previous quarter. This reflects our differentiated strategy to drive enriching digital experiences for our consumers across mobile, broadband and entertainment, coupled with our focus on cybersecurity and ICT as key drivers of our enterprise business,” says StarHub’s CEO Nikhil Eapen.

“We also concluded our DARE programme, exceeding our initial cost savings target by 30%, giving us the confidence to upgrade our service EBITDA margin guidance and set the stage for DARE+,” he adds.

StarHub’s DARE+ programme seeks to create sustainable long-term revenue growth, while transforming the telco’s operating model and optimizing cost over time, continues Eapen.

Shares in StarHub closed 1 cent lower or 0.79% down at $1.26 on Nov 10.

 

[Shion]

Analysts positive on stellar growth ahead for StarHub​

https://www.theedgesingapore.com/ca...nalysts-positive-stellar-growth-ahead-starhub
Following StarHub’s latest 3QFY2021 ended September earnings update, analysts are rather positive on the group’s future growth prospects.

The telco group reported earnings of $40.2 million, down 9.5% y-o-y, with revenue improving by 5.6% y-o-y to $517.2 million

Excluding the effects of payouts for the jobs support scheme (JSS), net profit after tax attributable to shareholders (or earnings) increased 5.1% y-o-y to $40.0 million.

Following its business update, CGS-CIMB Research is keeping its “add” call on StarHub with an increased target price of $1.70 from $1.65 previously.

Analyst Foong Choong Chen notes that despite the stiff competition, 3QFY2021 mobile revenue was down just 0.6% y-o-y (lower excess data usage). On a q-o-q basis, it rose 2.4% due to 3.6% higher postpaid average revenue per user (ARPU) on take-up of 5G plans, and 1.0% postpaid subs growth.

Fixed Enterprise revenue grew a robust 17.3% y-o-y, led by Strateq (+17.0%) and cybersecurity (+73.1%). StarHub said the latter’s growth is sustainable, underpinned by a strong and growing orderbook into FY2022. Meanwhile, Pay TV revenue dipped 4.5% y-o-y on lower subs, while fixed broadband revenue rose 9.5% y-o-y thanks to reduced discounts and subs upgrading to higher-priced 2Gbps plans.

The analyst has raises FY2021-2023 core EPS estimates by 14-29%, to factor in the postponement of IT transformation-related Opex to FY2022 onwards and higher revenues from the mobile and enterprise segments.

“We now see core EPS being stable y-o- in FY2021, down 7.9% y-o-y in FY2022 (IT transformation Opex), then up 12.8% y-o-y in FY2023 (full roaming revenue recovery, further Enterprise growth). Based on 80% payout ratio, we project 5.6-6.3 cents DPS in FY2021-2023, with 3.6 cents expected in 4QFY2021,” says Foong.

DBS Group Research is also keeping its “buy” recommendation on the stock with a target price of $1.60.

Analyst Sachin Mittal likes the stock for its three engines of sustainable growth. “StarHub offers 10% annual earnings growth over FY2021-2023 led by recovery from the pandemic in FY2022, reversing five years of decline from mobile services; sustained growth in fixed broadband business as consumers shift to higher speed plans while content costs for TV business are reigned in; and growth of cybersecurity & regional ICT services,” he says.

On top of that, StarHub is trading below its five-year historic PE ratio of 15.5 times. Hence, the analyst expects the stock to rerate towards its +2 standard deviation PE ratio of 18.1 times with revival of earnings growth after 5-years of decline. The stock offer an FY2021 dividend yield of 4.9% and FY2022 dividend yield of 5.4%, based on an 80% payout ratio.

Along with its results announcement, StarHub also announced that it will be acquiring a 60% stake in HKBN JOS in Singapore and Malaysia for a consideration of $15 million.

Mittal sees this as a financially accretive acquisition that could help the group enhance its ICT business.

On the other hand, UOB Kay Hian is less upbeat as it keeps its “hold” call on StarHub with a target price of $1.30.

For analyst Chong Lee Len, StarHub’s latest results came in within expectations, with 9MFY2021 core net profit coming in at $107.3 million, an increase of 6% y-o-y, accounting for 75% of his full-year forecast.

Overall, Chong is positive on StarHub’s growth as revenue for the group’s mobile, enterprise and broadband segments saw improvement. Although Pay-TV saw a 5% y-o-y decline in revenue amid lower subscriber base and lower commercial and advertising contribution, ARPU improved y-o-y and q-o-q at $43/month due to the increased price for HomeHub bundled plans.

Chong too expects StarHub’s latest acquisition to be earnings accretive with potential cost synergies stemming from the consolidation of office/warehouse space for rental savings and joint procurement strategies.

As at 3.35pm, shares in StarHub are trading at $1.27 or 5.9 times FY2021 book with a dividend yield of 5.0%, according to DBS’ estimates.

 

[Shion]

StarHub bares 5-year DARE+ growth strategy​

Under the programme, the company targets to deliver cost savings of $280 million.

https://sbr.com.sg/telecom-internet/news/starhub-bares-5-year-dare-growth-strategy
StarHub has bared its five-year transformation and growth strategy called “DARE +,” in their bid to turn into a “company that connects digital lives for customers.”

DARE+ came after the conclusion of DARE 1.0 strategy in October 2021 which delivered over $270 million in cost savings, and 15% reduction in the telco’s operating expenditure levels.

Under the new strategic programme, StarHub targets $280 million in cost savings and $220 million in gross profit growth cumulatively between FY2022 and FY2026.

StarHub said DARE+ will also move the company from “quad play to ‘Infinity Play’.”

“StarHub will drive consumption through all-encompassing super-app platforms for customers, with the aim to offer as many services as possible on a self-serve, zero-touch basis, while achieving rapid speed-to-market and minimising cost and capital expenditure,” the company said.

Under DARE+, the company will continue to mesh its continuum of products and services into all-in-one offerings for its consumers.

The company said it also plans to strengthen their presence in cyber security and regional ICT by making further acquisitions.

StarHub recently proposed to acquire MyRepublic Broadband and HKBN JOS in Singapore, and HKBN JOS in Malaysia.

 

[Shion]

StarHub earnings climb 27.5% on stronger broadband, enterprise revenue​

https://www.businesstimes.com.sg/co...-275-on-stronger-broadband-enterprise-revenue
MAINBOARD-LISTED StarHub's earnings rose by 27.5 per cent for the second half of the year ended Dec 31 to S$81 million, up from S$63.5 million a year ago.

The telco also posted revenue of S$1.07 billion in the same period, a marginal decrease of S$0.3 million from figures posted a year earlier.

Within its different segments, StarHub saw 8.4 per cent growth in broadband revenue to S$98.9 million, as well as 6.4 per cent growth in revenue from its enterprise segment to S$372.6 million.

In particular, broadband average revenue per user (ARPU) stood at S$33 in the fourth quarter of last year, up from S$30 the year before. However, the number of subscribers declined from 498,000 to 484,000 in the same period.

Meanwhile, StarHub's entertainment segment's revenue registered a decline of 5 per cent to S$89.5 million; mobile revenue fell 0.7 per cent to S$270.9 million in the second-half of 2021.

Notably, the company's postpaid average revenue per user (ARPU) rose to S$30, while postpaid subscriptions rose from 1.44 million to 1.48 million in the second half of last year.

Still, prepaid ARPU remained lower at S$10 in the fourth quarter of last year, from S$11 a year ago. There were 468,000 prepaid subscribers in the same period, down from 564,000 subscribers in the year-ago period.

For the full year, StarHub's total revenue grew 0.7 per cent to S$2.04 billion. Net profit rose 17 per cent to S$148.3 million.

StarHub chief executive Nikhil Eapen said that the company has seen early indicators of Dare+, the company's five-year growth roadmap launched last November, bearing fruit with rising ARPU across all segments, in addition to strong 5G adoption and other encouraging metrics.

The company saw more than 300,000 5G subscribers as at end-FY2021, higher than the more than 250,000 subscribers it reported last November.

Eapen said: "These are proof points of our Infinity Play product and digital engagement strategies that delight Singapore consumers with experiences that drive consumption."

The company proposed a final dividend of S$0.039 per share, higher than the S$0.025 per share declared in the same period a year ago.

This brings the total FY2021 dividend to S$0.064, in line with the company's dividend policy to distribute at least 80 per cent of net profits. The company has also guided for a dividend of S$0.05 per share in FY2022 and FY2023, based on expectations that the company's Dare+ outcomes are met.

StarHub shares closed flat at S$1.33 on Friday before the results were released.

 

[Euqorab]

Hope it bounds higher

 

[Shion]

Analysts keep neutral on StarHub as they wait for growth​

https://www.theedgesingapore.com/ca...nalysts-keep-neutral-starhub-they-wait-growth
Analysts have largely kept their "neutral" calls on StarHub following its FY2021 earnings that dipped slightly, but with positive guidance for the current FY and next.

On Feb 11, the telco reported earnings of $149.3 million for the year ended Dec 31 2021, down 5.5% y-o-y, as it booked lower government subsidies. Excluding the payouts meant to help Singapore based companies cope with the pandemic, StarHub would have reported earnings of $148.3 million, up 17% y-o-y.

FY2021 revenue was largely unchanged at 0.7% higher y-o-y to $2.04 billion, mainly due to higher contributions from broadband and enterprise business, partially offset by lower revenues from mobile, entertainment and sales of equipment.

The company declared a final dividend of 3.9 cents, higher than 2.5 cents declared in the previous year. This brings StarHub’s FY2021 distribution to 6.4 cents, or a payout ratio of 80%, in line with its dividend policy.

StarHub also guided for its service revenue to improve by at least 10% in FY2022 and another 5% to 10% in FY2023. It has also guided Ebidta margins to be at least 20% in FY2022 and 23% in FY2023.

For both FY2022 and FY2023, StarHub is committed to pay a dividend of at least 5 cents per share.

PhillipCapital analyst Paul Chew likes StarHub’s DARE+ transformation-led cost controls, which brough service Ebitda margin to 30% for FY2021, beating his expectations of 26% and StarHub’s guidance of 26%. “We believe StarHub’s transformation efforts to realign pay TV programming and digitalise processes resulted in lower content cost, dealer commissions and staff cost,” says Chew.

On the other hand, Chew is concern about StarHub’s lack of revenue growth. FY2021 revenue was marginally 0.7% higher y-o-y at $2.04 billion, but 4QFY2021 saw revenue unchanged at $1.07 billion from the previous year, with a 1.4% y-o-y drop in service revenue. ARPU for mobile was also flat y-o-y during the quarter despite 300,000 5G subscribers (or 20% of postpaid). Chew finds that the absence of roaming remains a major headwind for the group.

Meanwhile, StarHub’s cybersecurity segment is “still in investment mode” according to Chew. Although FY2021 revenue for cybersecurity enjoyed a 22% y-o-y jump to $268 million, Ebitda was 7% lower y-o-y at $25.5 million. Net profit was almost halved to $1.7 million and profitability from this segment was impacted by an inventory write-off of $4.2 million.

Overall, Chew, who has kept his "neutral" call and $1.35 price target on the stock, notes that StarHub has made tremendous headway in removing fixed cost, while its aggressive cost initiatives have supported earnings.

With most of the cost restructuring almost completed, StarHub needs to invest for growth (DARE+ FY2022 to FY2026 growth roadmap). The current upfront investments in technology and staff are to further digitalise its internal platforms and 5G network. After the completion of these investments, StarHub’s management has guided $220 million in profit opportunities and cost savings $280 million.

Maybank Securities Singapore's Kelvin Tan, who recently took over coverage of the stock, describes StarHub's earnings as above his expectations.

“The DARE+ strategy points to early signs of rising ARPUs across all segments and a strong 5G adoption rate is positive. But higher upfront capex in executing the new strategy and lingering uncertainty on regional re-opening are major offsetting factors,” says Tan, who kept his “hold” call on StarHub but with an increased target price of $1.45 from $1.25.

Similarly, UOB Kay Hian has its “hold” recommendation with a $1.30 target price.

Although that research team likes that good cost discipline and lower depreciation has contributed to StarHub’s improvement in net profit, it still remains somewhat cautious on StarHub's short term prospects.

With StarHub expecting Ebitda margins to fall to 20% in FY2022 from 30% currently, due to frontloaded transformation investments, UOBKH is cutting its earnings estimates by 12% for FY2022 and 6% for FY2023.

“The DARE+ transformation will yield positive cost savings from 2023 onwards, suggesting savings from utilities coupled with new growth strategy including 5G products and services,” says UOBKH, while noting that the group has guided for margins to recover to at least 23% in FY2023.

DBS Group Research's Sachin Mittal too has maintained his “hold” call on StarHub with a target price of $1.31.

StarHub will invest $270 million on digital platforms & 5G networks over the next three years. The bulk will be front-loaded in FY2022, and benefits will accrue from FY2023 onwards. A big portion of these investments will be treated as an operating expense, which Mittal reckons might lead to 29% earnings decline in FY2022, followed by a 36% growth in FY2023 and a further 10% growth in FY2024.

To that end, Mittal projects a dividend of 5 cents in FY2022, before a strong recovery in FY2023.

The way he sees it, any mobile sector consolidation in the next six to 12 months would be a key catalyst to the stock, which could lead to his bull-case target price of $1.55.

As at 3.10pm, shares in StarHub are trading at $1.28 or 14.8 times FY2022 earnings with a dividend yield of 3.8%.

 

[Euqorab]

Bought at highs
Still thinking want to sell anot

 

[angcheek]

Their TV channels expensive and cmi ...

 

[reddevil0728]

Bought at highs
Still thinking want to sell anot

what's your consideration?

 

[wutawa]

Bought at highs
Still thinking want to sell anot

My 2 considerations whenever i cut loss:
1. I sell if i will lose more or same.
2. I have alt investment to gain much more (can hold fund for wks before buying).

(not vested in starhub)

 

[simon_84]

Bought at highs
Still thinking want to sell anot

Have gradually sell off starhub in batches since it dip from the 4 dollars price point.
This counter no hope for turnaround.

 

[Shion]

StarHub partners F-Secure to launch cybersecurity app​

https://www.theedgesingapore.com/ne...ub-partners-f-secure-launch-cybersecurity-app
StarHub has launched CyberProtect, an all-in-one online protection service which integrates antivirus, virtual private network (VPN) access, and advanced parental controls in a single app. Delivering on its DARE+ strategy of enhancing customers' digital lives with enriching services, StarHub is building a bubble of safety for customers to be entertained and productive online.

In partnership with global cybersecurity company F-Secure, CyberProtect can be installed on multiple devices, such as smartphones, tablets, and PCs belonging to individuals and families to protect them against viruses, ransomware, and other harmful apps that steal users’ personal data.

Traditional antiviruses rely on reactive scans often initiated by users when their devices are already infected with malware, while CyberProtect goes a step further to detect and remove malware automatically. This cutting-edge behaviour-based protection technology of CyberProtect accelerates responses to new threats on customers’ devices, quickly eliminating dangerous programmes behind the scenes.

CyberProtect also provides access to VPN, providing users with an encrypted connection to surf, stream, and network online in privacy.

“The greatest challenge for customers in cybersecurity is no longer failing to recognise that they are vulnerable targets, but not knowing what to do about it. Every time a new form of online threat surfaces, a fresh burden weighs on the minds of customers, and their online experience becomes riddled with worries,” said Johan Buse, StarHub’s chief of consumer business group.

“With CyberProtect, our goal is to simplify cybersecurity for customers, giving them peace of mind when they go online. We are eliminating the need for multiple apps to defend customers against different types of online threats, and providing a comprehensive service that will deliver both security and privacy. While there is no silver bullet in cybersecurity, this is a solution that works in tandem with sensible practices, to deliver an effective layer of protection that keeps customers safe,” he adds.

 

[Shion]

IMDA approves StarHub's acquisition of 50.1% stake in MyRepublic's broadband unit​

https://www.businesstimes.com.sg/co...on-of-501-stake-in-myrepublics-broadband-unit
LOCAL telco StarHub has been granted regulatory approval by the Infocomm Media Development Authority (IMDA) on Wednesday (Mar 9) to acquire a 50.1 per cent stake in MyRepublic's broadband unit.

In its decision on the proposed consolidation, IMDA found that the move could result in a horizontal consolidation as both companies compete in public Internet access services, Internet protocol telephony services and managed data network services.

Still, it found that the move was unlikely to substantially lessen competition in any of the identified markets.

Post-acquisition, StarHub had 34 per cent of broadband market share while MyRepublic had 6 per cent as at September last year. The market leader, Singtel, held 43.4 per cent of broadband market share, or 656,000 subscribers in the same period.

IMDA said that the merger could allow StarHub and MyRepublic to compete more effectively with competitive prices or more innovative services.

It also noted that there will still be other competitors within the different market segments. For instance, the residential broadband market will have at least 5 other service providers post-acquisition.

StarHub had announced its plans to acquire control of MyRepublic Broadband in September last year for an initial consideration of S$70.8 million.

If certain financial performance metrics are made, StarHub could invest a further S$92 million into its stake. StarHub will also have the option to acquire the remaining 49.9 per cent stake in MyRepublic Broadband from MyRepublic in the future.

At the time, StarHub said that MyRepublic's broadband customer base could gain access to its consumer and enterprise business offerings. It also expects to benefit from joint synergies in terms of joint go-to-market opportunities, future wholesale offerings and cost savings.

StarHub shares traded flat at S$1.25 as at 3.22 pm on Thursday.

 

[simon_84]

Have gradually sell off starhub in batches since it dip from the 4 dollars price point.
This counter no hope for turnaround.

Sold off last holding of starhub.
Price weakness too strong.

 

[Shion]

Analysts lukewarm on StarHub in light of ebitda margin down y-o-y​

https://www.theedgesingapore.com/ca...kewarm-starhub-light-ebitda-margin-down-y-o-y
Analysts are relatively neutral on StarHub in light of the telco’s bleak FY2022 earnings outlook, mitigated by new initiatives on the horizon.

For the 1QFY2022 ended March, StarHub reported net profit of $29.7 million, down 2.6% y-o-y and 27.7% q-o-q.

Total revenue for the quarter increased by 5.3% y-o-y but fell by 7.1% q-o-q to $512.7 million.

Service revenue grew by 10.7% y-o-y and 0.6% q-o-q to $416.0 million.

Operating expenses increased by 7.2% y-o-y but fell 4.6% q-o-q to $470.7 million.

The telco’s ebitda fell 11.1% y-o-y and 17.4% q-o-q to $109.1 million.

Service ebitda for the quarter fell 12.8% y-o-y and 18.0% q-o-q to $100.7 million while service ebitda margin fell 6.5 percentage points y-o-y and 5.5 percentage points q-o-q to 24.2%.

The lower ebitda was attributable to the lower margin, which more than offset the higher revenue.

Core earnings per share (EPS) fell 0.6% y-o-y and 24.5% q-o-q thanks to the lower depreciation, net interest cost and tax.

CGS-CIMB sees results as in line with expectations

CGS-CIMB Research analysts Foong Choong Chen and Sherman Lam have kept their “hold” rating on StarHub with an unchanged target price of $1.40.

“While StarHub’s 1QFY2022 ebitda and core EPS made up 25% and 37% respectively of our FY2022 estimates, we deem this largely in line as we expect a sequential pick-up in IT transformation costs and capex for the rest of FY2022,” say Foong and Lam in their April 30 report.

Moreover, the analysts note that StarHub’s 1QFY2022 service ebitda margin contracted sharply owing to higher operating expenses (opex), which includes approximately $9 million that StarHub incurred for initial investments related to its IT transformation initiatives.

“While 1Q margin is tracking above its FY2022 guidance by at least 20%, this is partly due to timing delays in the recognition of its IT transformation costs, which will pick up in the subsequent quarters,” explain the analysts.

There are however some clear positives for StarHub as well, with its 1QFY2022 mobile service revenue in line rising 3.9% y-o-y and postpaid average revenue per unit (ARPU) stable q-o-q, with some roaming recovery and 33% rise in 5G subs to over 400,000.

“We see ARPU improving in 2HFY2022 as roaming recovers. Prepaid ARPU (-20.0% qoq) was dragged by tighter competition, particularly from low-end postpaid SIM-only offers,” say the analysts.

Nevertheless, StarHub says tourist SIM sales have begun to recover in light of the greater reopening of international borders of late .

In addition, StarHub’s 1QFY2022 fixed enterprise revenue rose 18.9% y-o-y with the consolidation of HKBN Jardine OneSolution Holdings (JOS) Singapore and Malaysia since Jan 3.

Without JOS, StarHub’s revenue for its fixed enterprise segment was up by a mere 0.8% y-o-y as cybersecurity growth was offset by weaker network solutions and Strateq. The segment’s revenue slid 14.9% q-o-q as 4QFY2021 had a major cybersecurity project delivery.

For 1QFY2022, StarHub’s orderbook and pipeline for Strateq, cybersecurity and JOS remain at healthy levels.

Meanwhile, broadband revenue climbed 9.6% y-o-y on ARPU accretion with higher 1Gbps prices, 2Gbps take-up, while entertainment revenue from pay TV and OTT was up 4% y-o-y on subscriber gains.

While Foong and Lam’s target price represents a 20% discount to the telco’s discounted cash flow (DCF)-based fair value, given the projected weak earnings outlook for FY2022, the analysts are advocating investors to revisit the counter in 1HFY2023.

This is ahead of its potential earnings turnaround in 2HFY2023, they write.

Maybank sees potential in StarHub’s new initiatives even as 1QFY2022 patmi missed expectations

Maybank Securities analyst Kelvin Tan has also kept his “hold” rating on StarHub as the telco’s patmi missed his estimates at 23% of his full-year forecasts.

“Overall, 1QFY2022 net profit was underwhelming with increased mobile competition and the lumpy nature of its cybersecurity business, which we think will be backend loaded,” Tan writes in his May 1 report.

He has, however, upped his target price estimate on the telco to $1.32 from $1.29 previously. Tan has also kept his forecasts for FY2022 to FY2024 unchanged following the MyRepublic acquisition. A recovery is also expected in StarHub’s roaming revenues as international borders reopen.

In addition to noting the operational costs that dragged the telco’s bottomline as well as the improving operational parameters, Tan is positive on the telco’s new initiatives that may drive future growth.

“We see potential in leveraging the newly integrated MyRepublic’s regional market presence to explore new growth engines and offer differentiated solutions to its enterprise clients,” writes the analyst.

Management is also upbeat about more infinity play products and a Super App platform launching at the end of 2022, he adds.

On the counter’s value proposition, Tan says dividend yield has been a key investment thesis or StarHub. Despite the telco’s reducing its payout commitment from 20 cents to 16 cents, the potential for its distribution per share (DPS) to exceed its EPS remains.

PhillipCapital sees tailwinds in roaming segment albeit cost pressures in the near-term

PhillipCapital Group Research analyst Paul Chew has upgraded StarHub’s rating to “accumulate” from “neutral” with an unchanged target price of $1.35.

StarHub’s 1QFY2022 revenue and ebitda met the expectations of the analyst at a respective 23% and 27% of his FY2022 estimates.

Chew observes how StarHub’s broadband revenue has also reached a five-year high, with broadband revenue progressively growing through higher prices, lower discounted contracts and upsizing to higher speed 2Gbps plans. This is especially so as broadband has become an essential service amid Covid-19.

However, the analyst also considers how costs are piling up for StarHub, with service ebitda margin down almost 7% points to 24.2%, though it remains above FY2022 guidance by at least 20%.

The analyst expects higher costs in the coming three quarters, with ebitda margin recovery only expected in FY2023.

“We expect ebitda margins to contract further in the remaining three quarters of the financial year due to upfront investments in IT and staff costs,” says Chew, in light of how StarHub’s Ebitda most recently declined 11% y-o-y to $109 million.

The analyst also observes how mobile revenue growth was also softer than expected despite higher postpaid ARPU and subscribers. This is in addition to how there was a deterioration in prepaid revenue of more than 20% y-o-y.

As at 11.24am, shares in StarHub are trading at 1 cent up or 0.79% higher at $1.27 at a FY2022 P/B ratio of 3.3x and dividend yield of 4% according to Maybank’s estimates.

 

[Shion]

https://www.theedgesingapore.com/ne...ches-epl-packages-lower-prices-draw-fans-back