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StarHub Ltd CC3

Morningstar Rating
SGD 1.22 0.00 (0.00%)
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Company Report

StarHub Earnings: In Line but Mobile Revenue Decline Is Concerning

StarHub’s first-quarter result was broadly in line with our expectations. Still, the revenue mix was a little concerning, with higher-margin telecom network service revenue of mobile, entertainment, and broadband declining, while the likely lower-margin enterprise revenue increased. Excluding the now-sold D’Crypt, service revenue increased by 1.9% year on year, EBITDA declined by 1.4%, and net profit increased by 8.1%. Near-term profitability is partially a function of the level of Dare+ expenses.

Price vs Fair Value

CC3 is trading at a 613% premium.
Price
SGD 1.22
Fair Value
SGD 8.64
Uncertainty
Low
1-Star Price
SGD 4.53
5-Star Price
SGD 7.63
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

StarHub's revamping of its IT systems with its Dare and Dare+ programs will give it a cost advantage over its competitors.

Bears

The pay-TV business is in structural decline as customers continue to cut the cord and go with over-the-top options.

Is it the right time to buy, sell, or hold?
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Trading Information

Previous Close Price
SGD 1.22
Day Range
SGD 1.221.24
52-Week Range
SGD 1.001.29
Bid/Ask
SGD 1.22 / SGD 1.23
Market Cap
SGD 2.10 Bil
Volume/Avg
355,200 / 1.2 Mil

Key Statistics

Price/Earnings (Normalized)
10.16
Price/Sales
0.89
Dividend Yield (Trailing)
5.49%
Dividend Yield (Forward)
6.89%
Total Yield
6.33%

Company Profile

StarHub is one of three main telecommunications providers in Singapore offering products covering mobile, broadband, fixed voice, and pay television. StarHub operates a mobile network. The company's fixed network spans domestic and international backhaul. It used to reach residential premises with a hybrid fiber-coaxial network, which has now been replaced with the National Broadband Network. The Singapore government retains an indirect 57% stake through Temasek Holdings, while NTT Communications also holds a strategic 10% stake.
Sector
Communication Services
Industry
Telecom Services
Stock Style Box
Mid Core
Total Number of Employees
3,192

Competitors

Valuation

Metric
CC3
Z74
TPG
Price/Earnings (Normalized)
10.1618.5714.74
Price/Book Value
5.821.760.75
Price/Sales
0.892.991.57
Price/Cash Flow
5.4010.017.22
Price/Earnings
CC3
Z74
TPG

Financial Strength

Metric
CC3
Z74
TPG
Quick Ratio
1.171.260.63
Current Ratio
1.441.350.75
Interest Coverage
5.642.991.17
Quick Ratio
CC3
Z74
TPG

Profitability

Metric
CC3
Z74
TPG
Return on Assets (Normalized)
4.65%4.85%3.00%
Return on Equity (Normalized)
40.78%9.03%4.96%
Return on Invested Capital (Normalized)
8.07%6.74%4.81%
Return on Assets
CC3
Z74
TPG
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