• Maintain NEUTRAL with marginally lower DCF-derived Target Price of SGD1.78 (WACC: 7.5%, TG: 1.5%) from SGD1.90, 5% upside.
• StarHub's 1H18 results made up 62% of our full-year forecast but came in below consensus (57% of market estimates), which we consider to be broadly in line as we expect a weaker 2H. The enterprise fixed segment remained the bright spot, up 20% y-o-y in 1H18. This was however insufficient to compensate for the decline in mobile and pay-TV revenues, which are facing structural compression.
• We trim our 2019F-2020F core earnings by 1-6%, mainly to factor in higher margin dilution from the greater push into the enterprise fixed businesses and housekeeping adjustments.
• The stock is down 40% YTD with valuations at -2SD below historical EV/EBITDA mean, with prospective dividend yield at over 7%. We prefer Singtel (SGX:Z74).

Source: RHB Invest Research - 08 Aug 2018