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Hold on to StarHub as future earnings expected to improve: UOBKH

Samantha Chiew
Samantha Chiew1/26/2022 1:38 PM GMT+08  • 3 min read
Hold on to StarHub as future earnings expected to improve: UOBKH
Hold on to StarHub as it's on stable footing and has ammo to drive future earnings.
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UOB Kay Hian is keeping its “hold” call on StarHub with a target price of $1.30, as it believes that the stock is currently on stable footing and has a frontload capex to drive its future earnings.

Starhub continues to experience improvement on its operational parameters amid rational competition and increased 5G network rollout. Recent updates from StarHub’s management suggests continued improvements across all segments.

On the mobile front, prepaid competition remains rational while postpaid likely benefitted from the onset of 5G network rollout. “This, we believe, will help to partly address average revenue per user (ARPU) dilution from SIM-only plans as postpaid ARPUs have been stable since 1QFY2021. We also expect higher take-up of 5G mobile plans (5G ARPUs are estimated to be 1.2 times higher than 4G ARPUs),” says analysts Chong Lee Len and Chloe Tan Jie Ying in a Jan 25 report.

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