StarHub - UOB Kay Hian 2023-08-04: 2Q23 Above Expectations, Driven By Mobile & The English Premier League

• For 1H23, StarHub experienced broad-based growth across all segments. 2Q23 overall revenue and PATMI grew 0.5% y-o-y and 25.6% y-o-y respectively, driven by higher mobile and entertainment contributions.
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• Maintain BUY. Target price: S$1.37.

2Q23 results above expectations.

• StarHub (SGX:CC3) reported 2Q23 headline revenue and core PATMI of S$548.7m (+0.5% y-o-y, -1.6% q-o-q) and S$39.2m (+25.6% y-o-y, +4.5% q-o-q) respectively, driven by strong growth from the mobile and entertainment segments along with delays in Dareplus+ investments.
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• With an estimated S$90m (1H23: S$30m) of DARE+ transformative investments expected in 2H23, we reckon that 2H23 PATMI would likely moderate h-o-h nearer to our full-year estimates.
• Although 2Q23 service revenue grew (+4.8% y-o-y, +3.2% q-o-q), service EBITDA dipped slightly (-3.7% y-o-y, +5.5% q-o-q) on the back of investments with service EBITDA margins also softening (-2.0ppt y-o-y, +0.5ppt q-o-q) in 2Q23.
• StarHub declared an interim dividend of S$0.025/share, consistent earlier 2023 guidance of S$0.05/share, representing an annualised dividend yield of around 5%. See StarHub's dividend dates.

Mobile: 2Q23 revenue grew 12.2% y-o-y.

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Chong Lee Len UOB Kay Hian Research | Llelleythan Tan Yi Rong UOB Kay Hian | https://research.uobkayhian.com/ 2023-08-04 SGinvestors.io

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