Despite intense competition in Singapore’s mobile and broadband markets, StarHub is gaining ground. It has grown its subscriber base across all three segments—premium (StarHub), digital (Giga), and value (Eight)—widening its lead over rival M1 by six percentage points.
Enterprise services remain a bright spot, driven by strong growth in managed services and cybersecurity. Notable contract wins, including the JTC Punggol Digital District project, underscore StarHub’s execution strength and potential to replicate success in other markets.
Cybersecurity unit Ensign continues to deliver double-digit revenue growth, underpinned by ongoing investment in R&D and talent acquisition. While this supports long-term scalability, it could limit margin expansion in the near term.
“Overall, enterprise momentum is expected to remain firm. However, the enterprise segment’s structurally lower margins versus consumer could weigh on group profitability amid continued softness in the consumer business,” writes Saifee in his July 7 note.
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StarHub’s net leverage stands at 1.3 times, with about $600 million in cash, which management sees as supporting future M&A. However, cash levels are expected to dip due to the 700MHz spectrum payment. Mobile capital expenditure may also increase as the new spectrum rollout begins.
“Of the $50 million share buyback programme, $36 million remains available, which we view as providing downside support to the stock,” says Saifee.
Similarly, RHB Bank Singapore reiterates its “neutral” call with an unchanged target price of $1.14.
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RHB cautions that the company’s target of delivering $80 million steady-state incremental net profit after tax (NPAT) by FY2027 under its DARE+ transformation plan is looking harder to achieve.
In a July 8 note, RHB flags that stiff competition in the consumer market, lumpy costs associated with the decommissioning of legacy network assets, and IT investments will weigh on earnings in the near term. In 1QFY2025, ebitda grew just 0.3% year-on-year.
In June, StarHub paid for a smaller 20MHz block of the 700MHz 5G spectrum, a move that reflects the cautious operating environment. RHB believes the tight market conditions and monetisation challenges have diluted the business case for the spectrum. Rival M1 also opted for a smaller share.
“The market may still view the smaller spectrum procured as a pre-emptive move ahead of a market consolidation. Both StarHub and M1 have until June 30, 2026, to roll out 5G on the 700MHz spectrum,” according to RHB.
As at 4.09pm, shares in StarHub are trading 2 cents lower or 1.69% down at $1.16.
