StarHub - UOB Kay Hian 2024-02-09: 2023 Results Slightly Above Expectations, DARE+ Costs To Taper Off In 2024

• For 2023, StarHub reported higher revenue (+2% y-o-y) and underlying PATMI (+77% y-o-y), driven by broad-based growth across all service segments.
• Overall margins are expected to improve in 2024 on the back of ongoing cost optimisation efforts as well as an expected tapering off in DARE+ investments in 2H24.
• - Read this at SGinvestors.io -

Strong 4Q23 results.

• StarHub (SGX:CC3) exceeded our expectations slightly, reporting higher 2023 overall revenue (+2.0% y-o-y) and PATMI (+140.4% y-o-y), accounting for 99% and 106% of our full-year forecasts respectively. Excluding one-offs in 2022, 2023 underlying PATMI would still have surged 76.5% y-o-y.
• - Read this at SGinvestors.io -
• In our view, the slight beat on our PATMI forecasts was likely due to better margins from ongoing DARE+ cost optimisation efforts. Note that about S$160m of DARE+ investments were incurred in 2023 with an expected S$80m expected to be incurred in 2024; this is then expected to taper off in 2H24.
• For 4Q23, service revenue fell slightly (-1.5% y-o-y, +0.2% q-o-q), largely dragged by lower sales of equipment and entertainment revenue.

Higher dividend.

• Read more at SGinvestors.io.

Chong Lee Len UOB Kay Hian Research | Llelleythan Tan Yi Rong UOB Kay Hian | https://research.uobkayhian.com/ 2024-02-09 SGinvestors.io

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