“We now forecast a 5% y-o-y decline in FY2025 ebitda for StarHub, a revision from our previous expectation of a stable performance. While StarHub’s enterprise and managed services segments remain resilient, we expect the consumer mobile business to face headwinds,” wrote Mittal in an August 7 note.
Still, FY2026 is expected to benefit from the absence of transformation-related costs. About 90% of StarHub’s $270 million DARE+ transformation spending was incurred in FY2024, with the remaining recognised in 1H2025.
“We project an 11% earnings CAGR over FY2025 to FY2027, with at least 6 cents dividend per share annually. Furthermore, share buyback plan provides downside protection for the stock,” wrote Mittal.
DBS also highlights Ensign, StarHub’s 55.73%-owned cybersecurity venture, as a key source of potential value. “We assume a 2–3x price-to-forward revenue multiple for Ensign over the next 12 months, valuing the business between $770 million and $1.3 billion,” wrote Mittal. This would value StarHub’s share at $430 million to $716 million, or 20% to 34% of its current $2.1 billion market cap.
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StarHub holds an option to divest the stake to Temasek after October 4, 2025. DBS values Ensign at $0.25 to $0.41 per share, with a midpoint of $0.33, based on a 12-month forward revenue projection.
As at 3.27pm, shares in StarHub are at $1.23 flat.
