Some 1, 000 DBS customers with StarHub mobile plans will be the first in Singapore to use the NFC Mobile Payment Solution trial service for everyday mobile payments.
Trial users will be able to make payments with their mobile handsets at all merchant outlets that accept the MasterCard PayPass or the ez-link card, and subsequently on public transportation such as buses and trains.
Nomura lifts Starhub (CC3.SG) target price to $2.25 from $1.90 after raising FY10-11 earnings estimates by 3%-16%.
Tips “significant opportunity” in SME/enterprise segment over next few years on back of Singapore’s next-generation national broadband network.
Says current dividend yield of over 7% highest among peers, expected to be sustainable for at least next 12 months.
Still, keeps Reduce call on view stiff competition will take toll; “rising competition in the pay-TV segment could be exacerbated by cross-carriage regulations next year, and rising smart-phone penetration could impact margins adversely.”
Shares +0.4% at $2.67.
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Phillip Securities Research in a Nov 10 research report says: “StarHub reported 3Q10 operating revenue of $552.3 million (+2.8% y-o-y) and net profit of $82.0 million (-3.7% y-o- y). Revenue was 2.9% higher than our estimate of $536.7 million while net profit was 41.7% better than our estimate of $57.9 million.
This compared with a net profit of $85.2 million in the three months ended Sept 30, 2009, the firm said in a statement. StarHub had a operating revenue of S$552.3 million, up 2.8% from $537.1 million a year ago, helped by higher mobile and fixed network sales.
StarHub today announced net profit after tax fell 4% y-o-y to $82.0 for the third quarter ended 30 September 2010. Operating revenue rose 3% to $552.3 million compared to $537.1 million due mainly to higher service revenue.
Both Mobile and Fixed Networks services contributed to the bulk of the service revenue increase. Year-on-year, Mobile revenue grew 8% to $298.3 million.
Post-paid mobile services revenue was 9% higher at $230.9 million. Pre-paid mobile services revenue grew 3% to $67.4 million.
Goldman Sachs downgrades Starhub (CC3.SG) to Sell vs Neutral due to rich valuation of 14.6x FY11 P/E, risk to earnings growth, saying: “Momentum is against the company across pay TV, broadband and mobile (businesses).”
Goldman expects SingTel (Z74.SG) to grab pay-TV market share, capture more broadband customers using Singapore’s national broadband network.
Research house says investors will wait for signs of Starhub’s operational stability before being convinced that consensus 15% EPS growth forecast for FY11 can be attained. Still, lifts target price to $2.30 vs $2.15 after rolling over valuation period to FY11. Shares down 1.5% at $2.72.
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DBS Vickers downgrades StarHub (CC3.SG) to Sell vs Fully Valued; estimates StarHub could be paying $40 million-$60 million annually in lease costs to use SingTel’s (Z74.SG) fiber network to reach residential broadband, cable TV customers, according to Dow Jones.
StarHub is obliged to pay fixed amount for 6-7 years until contract’s expiry despite potentially declining cable subscribers as people switch to National Broadband Network.
Citigroup upgrades Starhub (CC3.SG) to Hold from Sell, lifts target price to $2.45 from $2.15 after reducing long-term capex assumptions, says Dow Jones.
Citigroup expects capex-to-sales ratio to normalse to 10%-11% from FY11 after peaking at 14% in FY10 as telco now in process of building its infrastructure to tap on Singapore’s high-speed national broadband network: “Dividends are thus better matched against free cashflow generation over the longer term, allowing sustainable (dividend) payout of $0.20/year.”
But notes valuation remains expensive while earnings growth still lacking. Shares off 0.4% at $2.48.
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Macquarie lifts Starhub’s (CC3.SG) target price to $2.97 from $2.62 after increasing FY11-FY12 earnings estimates by 5% each; keeps Outperform call, according to Dow Jones.
Macquarie expects investors to be positively surprised over next 24 months with increased contributions from corporate data business on back of Singapore’s new high-speed national broadband network, better dividend outlook due to lower capex; also notes pay-TV business holding up well.
Research house expects new broadband network to boost telco’s market share in corporate data space by 4% in FY11 from 15% now. Says overall profit margins should improve in absence of English Premier League, World Cup content costs.
Shares last +0.8% at $2.50.
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SingTel, as Southeast Asia’s biggest phone company is known, dropped 1.6%t to $3.06 at the end of Singapore’s morning session. Starhub, Singapore’s second-biggest phone company, fell 2.8%, the most since May 20, to $2.42. M1, the smallest of the three operators, slipped 1.3% to $2.23. The benchmark Straits Times Index fell 0.3%.
Phillip Securities lifts Starhub (CC3.SG) target price to $2.41 from $2.16 after increasing earnings estimates for FY10-12 by 5.1%, 32.3%, 41.9% respectively to account for higher broadband revenue following launch of Singapore’s next-generation national broadband network, says Dow Jones.
“With NGNBN, it can reach out to all businesses and homes in Singapore. This would place it on an equal footing to compete with SingTel, which is the current leader in the broadband market”, says Phillip. Still, research house is keeping Hold call on view Starhub will continue to face stiff competition from SingTel (Z74.SG), M1 (B2F.SG); “we also believe that SingTel and M1’s NGNBN plans are at least as attractive as Starhub’s.”
Shares off 0.8% at $2.50.
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Phillip Securities Research in a Sep 3 research report says: "StarHub held a media conference on Sep 2, 2010 to launch its plans and solutions for the Next Generation National Broadband Network (NGNBN). We are impressed by StarHub’s plans on NGNBN.
Singapore’s second-biggest telecom firm StarHub <STAR.SI> rose as much as 3.7% to a 22-month high on Wednesday on hopes the island’s new fibre-optic network may help the firm to get a bigger slice of the corporate data segment.
At around 11:00 a.m., StarHub’s shares were traded at $2.52 with over 2.9 million shares changing hands.
“With the roll out of the new network, we foresee StarHub making more headway in the corporate space as they will be able to sell more (data) services to schools, financial institutions etc.,” said Carey Wong, an investment analyst at OCBC Investment Research.
Singapore’s new fibre-optic network opened for business on Wednesday.
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Starhub (CC3.SG) best performer among Singapore telcos, +1.2% at S$2.49 although off new 52-week high of $2.55 set in early trade, on hopes for higher broadband revenue as launch of Singapore’s high-speed national broadband network now allows telco to service companies in central business district, where it had no access previously, says Dow Jones. Foray, if successful, will mean rival SingTel (Z74.SG) losing some market share in this space.
Daiwa upgrades Starhub (CC3.SG) to Outperform from Hold, raising target price to $2.65 from $2.17 after changing valuation basis to dividend discount model from discounted cashflow methodology, says Dow Jones.
Daiwa says telco offers attractive dividend yield, well positioned to gain market share in corporate broadband market with launch of Singapore’s high-speed national broadband network.
BNP Paribas lifts Starhub (CC3.SG) target price to $2.85 from $2.65, based on discounted cash-flow valuation, after accounting for lower pay-TV churn rate assumption, rolling over valuation base to 2011 vs 2010, says Dow Jones.
BNP says despite losing EPL football broadcast rights to SingTel (Z74.SG), Starhub’s pay-TV churn rate only slightly higher than before EPL loss. “StarHub’s non-sports content remains superior to SingTel’s.” Lowers 2010 pay-TV churn rate estimate to 10% vs 15%. Keeps Buy call.
Notes, “StarHub’s prospective (dividend) yield of 8.5% is attractive, especially in current volatile market environment.”
Shares last +0.4% at $2.36.
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Starhub (CC3.SG) off 2.5% at 5-session low of $2.32, bucking gains by most other STI components, as stock trades without dividend entitlement, says Dow Jones.
Telco to pay $0.05/share dividend Sept 3, has pledged to maintain payout every quarter, translating to attractive annual 8.4% yield based on yesterday’s close.
While dividend yield highest among Singapore telcos, concerns remain over Starhub’s ability to maintain payout given risk to its free cash flows as competitive pressure not letting up. Some analysts however, say concerns over rising competition may be overblown.
AmFraser Research in an Aug 6 research report says: “StarHub Ltd’s 2Q10 results were in line with expectations, we maintain a full year net profit fall of 16% y-o-y, with fair value at $1.88. Expenses mainly outpaced revenue.
Kim Eng Securities upgrades StarHub (CC3.SG) to Buy from Sell on optimism over telco’s $0.20/share dividend payout this year, FY11 earnings prospects, says Dow Jones.
Kim Eng lifts target price to $2.78 from $1.87, based on average sector P/E of 15x FY11 earnings vs 10x FY10 P/E previously.
