Latest Forum Topics / StarHub Last:1.22 +0.01 | Post Reply |
Starhub
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oinkoink1999
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21-Jul-2009 11:34
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this is really a low beta stock..should i ditch this and buy M1? LOL.. |
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nickyng
Supreme |
21-Jul-2009 11:25
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hmm...WHO is playing this 1 lot game again har ?!??! SI BEH bo liao ! :P
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KIMPEK
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20-Jul-2009 17:55
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siah... | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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nickyng
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20-Jul-2009 17:54
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err...2.23 ? dun think will come soon :)
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KIMPEK
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20-Jul-2009 17:33
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Quite disappointed with this counter,, once it break even(2.23) will sell it off... |
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niuyear
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16-Jul-2009 16:58
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By CIMB dated 15 July 2009 P/S - sorry , some data like not in alignment. I think due to the programme whereby when we copy and paste, it will go out of alignment. |
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niuyear
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16-Jul-2009 16:56
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• sector revenue growth of 3% and sector EBITDA to be relatively flat on a qoq basis. Specifically, we see revenues being relatively lifeless owing to stagnating usage patterns and weakness in roaming, IDD and migrant worker usage. The compensating factor, however, would be the growth in data services. Cost containment, while an ever-present theme, will face resistance from normalising subscriber acquisition and retention cost (SAC) after a seasonally low 1Q09. Key themes to watch out for are a) normalising SACs, b) weak toplines, c) market share trends, d) cost containment and e) skirmishes in broadband. No surprises expected. We anticipate a fairly uninspiring 2Q where we project• their success in curbing, if not improving, their market share erosion which has now descended near their internal threshold. Thus, we anticipate revenue to decline by 1-2% for 2Q exacerbated by slower roaming, and weaker mobile usage among the migrant worker segment. We project EBITDA margin declines of 0.5-1% pts on a qoq basis leading to a net profit contraction of 9-10% sequentially. For StarHub, we see 2Q revenue declining by a smaller 1-2% relative to 1Q. We think that there could be multi-faceted threats to topline from its discretionary base which is arguably more vulnerable to an economic slowdown. In terms of margins, we believe that there could be some slight pressure on margins owing to promotion campaigns and potential down trading. Thus, we believe that EBITDA margins would trend downwards slightly by close to 1% pts leading to net profit contraction of 5-7% qoq decline. SingTel Singapore should see a 4% qoq revenue rebound in 2Q09, on the back of wireless and wired broadband revenue. EBITDA margins should fall from the seasonally high 1Q09 of 37.6% to 36% in 2Q as subscriber acquisition and retention costs rise from its seasonal low. Expectations for operators. For M1, we think the key event would centre around• market, we believe that telcos will not outperform the market. Hence, we advise investors to switch out of telcos into high beta cyclicals and reiterate our Neutral stance on the sector. That said, dividend yields are a prime downside supporter with average yields of 4-9% for CY09. Maintain NEUTRAL on the sector. Given our more optimistic outlook on the stock• earnings turnaround, exposure to emerging markets and the strengthening regional currencies. We maintain our OUTPERFORM rating on the stock with a SOP-based target price of S$3.20. Potential re-rating catalysts include qoq earnings growth driven by the strong performances of its key associates. We advocate switching out of StarHub (Underperform, Target price: S$1.54) into SingTel as we believe its share price will come under pressure when bidding for rights to broadcast the Barclays Premier League begins in 3Q09. Top pick is SingTel. Our top pick in the sector continues to be SingTel for itsSector comparisons Target Core 3-yr EPS P/BV ROE Div Bloomberg Price price Mkt cap P/E (x) CAGR (x) (%) yield (%)ticker Recom. (Local) (Local) (US$ m) CY2009 CY2010 (%) CY2009 CY2009 CY2009SingTel ST SP O 3.16 3.20 34,472 13.5 12.2 8.8 2.3 17.4 4.0 M1 M1 SP N 1.59 1.54 975 9.7 8.9 1.6 5.7 61.8 8.7 StarHub STH SP U 2.16 1.58 2,533 11.4 13.8 1.4 26.8 263.1 8.3 Simple average 11.5 11.6 3.9 11.6 114.1 7.0 O = Outperform, N = Neutral, U = Underperform, TB = Trading Buy and TS = Trading Sell Source: Company, CIMB-GK Research [ 2 ] 2Q09 earnings preview Our expectations for 2Q. sector revenue growth of 3% and sector EBITDA to be relatively flat on a qoq basis. Specifically, we see revenues being relatively lifeless owing to stagnating usage patterns and weakness in pressure points of roaming and IDD. The compensating factor, however, would be the growth in data services. Cost containment, while an ever-present theme, will face resistance from normalising subscriber acquisition and retention cost (SAC) after a seasonally low 1Q09. Key themes to watch out for in 2Q are: a) normalising SACs, b) weak toplines, c) market share trends, d) cost containment and e) skirmishes in broadband. We anticipate a fairly uninspiring 2Q where we projectMore normalised SACs. abnormally low SACs post-MNP and b) the strategic initiatives by the respective operators. We see SACs normalising for two primary factors: i) theAbnormally low SACs when SACs ballooned to unsustainably high levels, see Fig 1, which consequently pushed margins down (Fig 2) to the region of 35-36% from 37-40% mark before. In response, operators dialled back too aggressively, and in 1QCY09 signalled their intentions of raising their SACs to more sustainable levels and as a tool for subscriber acquisition. – We believe that there was an overreaction to the MNP periodDifferent strategic initiatives on preserving its market share, after seeing it dwindle down to its internal threshold of a 25% market share. As a result, we have seen heavier handset subsidies on offer by M1. Meanwhile, SingTel has been equally pugnacious, as it was armed with a fresh marketing budget for FY3/10 having recently concluded its financial year end in Mar. On the other hand, we understand that StarHub was less combative but did offer its fair share of handset subsidies in 2Q. – In its 1Q conference call, M1 signalled that it was intentFigure 1: SACs (S$) 0 50 100 150 200 250 300 350 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 SingTel StarHub M1 Source: Company, CIMB-GK Research Figure 2: Sector EBITDA margins (%) 30.0% 32.0% 34.0% 36.0% 38.0% 40.0% 42.0% 44.0% 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 Source: Company, CIMB-GK Research [ 3 ] Cost containment. resistance from normalising SACs levels. However, we believe that most of the operators have factored this into their guidance for FY09. To recap, SingTel Singapore is guiding for EBITDA margins to decline to the 36-38% for FY3/10 from 37.3% in FY09. StarHub upped its service EBITDA margin guidance to 32% (from its earlier guidance of 31%) for FY09 vs 31.7% in FY08. M1 believes that operations will remain stable in FY09. While the emphasis on cost containment remains, it will faceWeak toplines. usage patterns and lower roaming and IDD usage, which leads us to believe that 2Q revenues may be fairly pedestrian. We anticipate that sector revenues would grow in the order of 3% on a qoq basis. That said, there should be some support from nonvoice services especially in wired and wireless broadband, an area where all telcos have been actively pinpointing to stave off weakness in their bread-and-butter voice services. We believe that in 1Q09, wireless broadband made up about 5% of StarHub’s total revenue, 8% to M1’s total revenue and 3% to SingTel’s revenue. The economy continues to wreak havoc on toplines causing stagnantHow will market share shift? of the three operators. M1 has already trumpeted its plans on defending its market share having seen it descend to its internal threshold of 25% (Fig 3). However, they stand at a disadvantage vis-à-vis their two larger rivals given their single product focus and inability to offer bundling options. But the overriding theme in the jostling for market share is the game-changing NGNBN where competition and new players would be introduced. Unsurprisingly, we believe that operators are keen to lockdown their higher-value subscribers and poach other subscribers before this new paradigm emerges. As a consequence, we have seen more aggressive handset subsidies, more attractive bundling promotions and various initiatives on the broadband front. A keen area of focus will be the shifting market sharesSkirmishes in broadband. skirmishes in broadband, more on the wired broadband variety. We believe this supports our thesis that retail broadband pricing is bound to come under pressure ahead of the NGNBN rollout. We also think that operators are looking to tap into the pent-up demand for wireless broadband given the proliferation of smartphones and notebooks and the fairly mobile society present in Singapore. Some of the key prepaid wireless broadband and other broadband initiatives launched in 2Q are: Throughout the quarter, there had been rather aggressive• usage for a period of 3-days for S$18 at speeds of up to 7.2 Mbps. On the fixed broadband side, M1 provided heavier discounts for its 15 Mbps, 30 Mbps and 100 Mbps plan. In Apr, M1 launched Singapore’s first wireless broadband product, offering unlimited• variant, offering speeds of either 2 Mbps or 7.2 Mbps. It offered various rates including an hourly rate, a daily rate, a 3-day rate, and a five-day rate. StarHub then followed up in May by offering its own prepaid wireless broadband• dropped the 8 Mbps plan in favour for a 6 Mbps one at slightly lower cost and introduced a new higher end 15 Mbps plan. For SingTel, it raised its pricing for its fixed broadband product on the 3 Mbps plan,Figure 3: Subscriber market share (%) 20% 25% 30% 35% 40% 45% 50% 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 SingTel StarHub M1 Source: Company, CIMB-GK Research [ 4 ] Preview of the operator’s 2Q performance M1. not improving, their market share erosion which has now descended near their internal threshold. Concomitantly, being a mobile-centric player, the loss in subscribers has a more direct impact to top line. Therefore, we anticipate that revenue would contract by 1-2% qoq for 2Q, exacerbated by slower roaming and mobile usage. However, there should be some alleviation stemming from moves to contain market share loss and focus on non-voice services. Meanwhile, we believe that EBITDA margins could take a slight hit, owing to more intensive subscriber acquisition efforts. We project EBITDA margin declines of 0.5-1% pts leading to a net profit contraction of 9-10% on a qoq basis. For M1, we think the key event would centre around their success in curbing, ifStarHub. to 1Q. We think that there could be multi-faceted threats to topline from its discretionary base which is arguably more vulnerable to an economic slowdown and its relatively less intense marketing campaigns. In terms of margins, we believe that there could be some slight pressure on margins owing to promotion campaigns and potential down trading. Hence, we believe that EBITDA margins would trend downwards slightly by close to 1% pts leading to net profit contraction of 5-7% on a qoq basis. In StarHub’s case, we see 2Q revenue declining by a smaller 1-2% relativeSingTel Singapore 2Q09, on the back of wireless and wired broadband revenue. EBITDA margins should fall from the seasonally high 1Q09 of 37.6% to 36% in 2Q as subscriber acquisition and retention costs rise. Also, increasing contributions from SCS’s lower-margin IT revenue should also dilute margins. We will preview SingTel’s results separately. . SingTel Singapore should see a 4% qoq revenue rebound inFigure 4: 2QCY08 estimates for StarHub and M1 2QCY09 Projections (S$m) 1QCY09 actual (S$m) qoq growth (%) 2QCY08 actual (S$m) yoy growth (%) Revenue StarHub 525 531 -1.1% 531 -1.1% M1 185 186 -1.0% 205 -10.1% EBITDA StarHub 163 168 -3.0% 147 10.9% M1 75 76 -2.1% 77 -2.5% EBITDA margins (%) StarHub 31.0% 31.6% 27.7% M1 40.5% 40.9% 37.3% Core net profit StarHub 78 82 -4.9% 64 21.9% M1 33 36 -8.8% 34 -3.5% Source: Company, CIMB-GK Research, Valuation and recommendation Maintain Neutral on the sector. market, we believe that telcos will not outperform the market. Hence, we advise investors to switch out of telcos into high beta cyclicals and reiterate our Neutral stance on the sector. That said, dividend yields are a prime downside supporter with average yields of 4-9% for CY09. Given our more optimistic outlook on the stockSingTel is our top pick. earnings turnaround and exposure to emerging markets. We maintain our OUTPERFORM rating on the stock with a SOP-based target price of S$3.20. Potential re-rating catalysts include qoq earnings growth driven by the strong performances of its key associates. Our top pick in the sector continues to be SingTel for itsSwitch out of StarHub to SingTel. price: S$1.54) into SingTel as we believe its share price will come under pressure when bidding for rights to broadcast the 2010-12 seasons of the Barclays Premier
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rodney301
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16-Jul-2009 16:56
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recent price drop may be the sentiment caused by the change of head in starhub. but i think its mainly due to speculators who shorted this heavily. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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rodney301
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16-Jul-2009 16:53
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yeap. got it. but i believe that $1.54 seems a bit too low for a share that is the 2nd largest telco in singapore. by 2012, the new optic fibre internet will be introduced and internet market share may just sky-rocket. The $1.54 target was stated due to consideration of the higher costs of bidding for EPL broadcasts. But ultimately, consumers are the ones paying for the fees so I believe that any hike will be imposed on the EPL viewers
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winstonz
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16-Jul-2009 16:50
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I also can't find. Which broker downgraded starhub? Can you just paste the article? | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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niuyear
Supreme |
16-Jul-2009 16:48
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Hope you got it? |
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niuyear
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16-Jul-2009 16:46
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Can you just type/search under The Society of Remisiers (Singapore) ? Then go to the Research |
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rodney301
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16-Jul-2009 16:43
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niuyear, the link is incorrect. :D
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niuyear
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16-Jul-2009 16:39
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I wanted to copy and paste here the report but it is way too long. Plse view it at www.remisers.org. Though it always comes in the afternoon, but, sometime, read it as a guide. :) |
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dealer0168
Elite |
16-Jul-2009 16:27
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That is a attractive price. So the down is due to analyst downgrade. Anyway all defensive stock did not perform...basically yesterday. I thk even today also. Btw will be interesting to see how Starhub progress. Looking at the chart, the uptrend progress for it currently still looks possible. Monitor for a while first.... see if there is any changes in the signal. Analyst news sometime is really an impact...haha
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niuyear
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16-Jul-2009 16:10
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Star hub has been down graded to 1.54. !! It wld be a gd buy if at this price. |
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dealer0168
Elite |
15-Jul-2009 16:15
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Bc starhub is a defensive stock. All defensive stock are not performing well. Lots of people are drawing out of Defensive stock & go forward for those that can rally up faster (since singapore announce they are out of recession or bc economy are more brighter). (my opinion) |
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KIMPEK
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15-Jul-2009 15:57
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Why tis counter is down, when all other counter all up, just because of change of CEO???? |
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rodney301
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10-Jul-2009 14:13
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got in a few days back. starhub is about to release the financial results in august. probably going to get 4.5cents dividend (probably same dividend policy of 4.5 cents per quarter which is about 8% annual dividend yield) when results are released. :D ocbc investment research gave it a buy rating in May (fair value of S$2.88) . here's the link. http://www.ocbcresearch.com/Article.aspx?type=research&id=20090508103138_10995 |
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jasonongsc
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04-Jun-2009 00:29
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hmm any reason for the sharp drop today ? :) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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