Towards Financial Freedom
STH - Ringing Up a Strong 1H2013
STH's 1HFY13 results were in line, with the following key takeaways: i) the higher take-up of tiered data plans raised q-o-q postpaid ARPU, and (ii) the EBITDA margin improved from a lower volume of handsets sold. We are still NEUTRAL (FV: SGD4.18) given the stock's rich valuation, although it is well-supported by a 5% sustainable dividend yield. We prefer M1 (NEUTRAL, FV: SGD3.25) for exposure to the sector.
- Strong 1H, but expect weaker 2H. Although StarHub (STH)'s 1HFY13 core earnings made up a strong 56% and 53% of our and consensus estimates respectively, we consider the numbers to be in line as we expect a weaker 2H from higher handset subsidies and increased competition. Overall service revenue (excluding handset sales) were flat y-o-y in 1HFY13 (+3% q-o-q), reflecting continued pressure on pay-TV revenue (-5% y-o-y). An expected five-cent DPS was declared.
- Higher postpaid ARPU from tiered plans. 362k STH subscribers had moved to its tiered long term evolution (LTE) data plans as at 2QFY13, a 33% rise q-o-q. This fuelled the 6% q-o-q rise in postpaid average revenue per user (ARPU) and a 5% sequential increase in postpaid revenue. We expect the take-up of tiered plans to keep growing on the back of the expanded LTE footprint and STH to consider raising price points by 4Q13, allowing for better data monetisation.
Source: OSK
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This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
