StarHub cut to 'hold' by CGS-CIMB on poor outlook for mobile and pay TV sales

SINGAPORE (Nov 7): CGS-CIMB Securities has downgraded StarHub to “hold” from “add” with unchanged target price of $2.00 on negative outlook for mobile and pay TV revenue.

Although StarHub’s 14.3x FY19F EV/OpFCF is in line with the Asean telco average, CGS-CIMB expects the telco’s mobile revenue to decline by 7.5% and 7.1% in FY18F and FY19F respectively, due to competition from TPG’s entry into the market.

Broadband revenue is also expected to be flattish in FY18-20F as positive effects from subscribers upgrading to higher-speed plans diminish while StarHub’s pay TV revenue would decline by 8.8% CAGR due to competition from over-the-top video platforms and pirated set-top boxes.

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