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Organization Behavior

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Submitted By myatyadanartoe
Words 1916
Pages 8
Singapore | Wireless Telecommunication

Asia Pacific Equity Research

STARHUB LTD | HOLD
MARKET CAP: USD 5.6B

26 Feb 2015
Company Update

AVG DAILY TURNOVER: USD 5M

FY15 OUTLOOK QUITE CAUTIOUS

HOLD (maintain)





Fair value

S$4.17

add: 12m dividend forecast

S$0.20

versus: Current price

S$4.41

FY14 figures within 2% of forecast
Guides for very modest revenue growth
New FV of S$4.17

12m total return forecast

FY14 results within forecast
StarHub Ltd reported a slightly better-than-expected set of 4Q14 results last night, which saw revenue climbing 5.1% YoY and 9.4%
QoQ to S$592.0m, driven by the still-strong demand for the new
Apple iPhone 6 and 6+. Aided by a firmer-than-expected service
EBITDA margin of 33.8% in 4Q14 (versus its FY14 guidance of 32%), net profit jumped 10.1% to S$94.2m. StarHub declared a quarterly dividend of S$0.05/share as guided. For the full-year, revenue grew
0.7% to S$2387.2m, or about 1.1% ahead of our forecast, while net profit slipped 9.1% to S$370.5m, and was just 1.7% above our estimate. Broadband ARPUs still slipping
As before, StarHub continued to see intense competition in its
Broadband business, where revenue tumbled another 15.3% YoY in
4Q14 (albeit not as bad as the 17.4% decline in 3Q14). Although it managed to add 8k new customers in the quarter, monthly ARPU fell further to S$34 (lowest in history), as more took up lower price plans.
Fortunately, mobile business saw modest improvement (revenue
+3.2%), aided by a seasonal improvement in ARPU to S$71/month from S$69 in 3Q14. Pay TV was again stable, with revenue flat YoY, although ARPU recovered to S$52/month from S$51 in the previous two quarters.
FY15 guidance has cautious feel
Going forward, StarHub expects FY15 service revenue to grow in the low single-digit range, driven mainly by its enterprise fixed

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