SINGAPORE (Oct 19): UOB Kay Hian is maintaining “buy” on StarHub with a higher target price of $2.30 compared to $2.10 previously after factoring cost savings from the group’s new operational efficiency programme, which is expected to generate savings of $210 million over three years.

The research house has raised profit forecasts for 2019 by 15.3%, and continues to like the stock due to improvements in customer service and operational execution under new CEO Peter Kaliaropoulo. It also sees a reduced risk of StarHub mounting a hostile takeover of M1.

As a result of the telco’s recent decision to cut 300 of its employees, hence downsizing its workforce by about 12%, UOB is estimating a 7.5% reduction in staff costs for 2019.

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