• StarHub’s revenue from the mobile segment contracted 6.6% y-o-y on post-paid ARPU erosion while pay TV revenue declined 4.8% y-o-y on the loss of 11,000 subscribers. Fixed enterprise revenue grew 22.4% y-o-y, driven by growth of the managed services segment through the acquisition of Accel Systems & Technologies and D’Crypt.
• New CEO Peter Kaliaropoulos will work on protecting StarHub’s high-value mobile customer base, adopting a variable cost model for content and pursuing growth for fixed enterprise.
• Maintain HOLD with a new target price of S$1.92. Entry price: S$1.65.

2q18 Results

StarHub reported a net profit of S$61.7m for 2Q18, down 22.9% y-o-y compared to a restated 2Q17. The results were in line with our expectation of S$63.1m.

Source: UOB Kay Hian Research - 08 Aug 2018