StarHub has maintained its neutral rating with a target price of S$1.14, following its acquisition of a smaller 20MHz block in the 700MHz spectrum. This move, according to RHB’s latest report, mirrors the current operating environment and highlights ongoing uncertainties surrounding the timing and benefits of StarHub’s transformation efforts. Despite these uncertainties, the company offers a 6% dividend yield for FY25, which serves as a mitigating factor against potential downside risks.
The acquisition is part of StarHub’s strategic approach to navigate the competitive telecommunications landscape. The company’s focus remains on market consolidation as a key catalyst for re-rating, which could potentially enhance its market position. However, the timing of such consolidation and its impact on StarHub’s operations remain uncertain.
RHB’s analysis underscores the importance of StarHub’s dividend yield, which is considered attractive in the current market. The report suggests that whilst there are challenges ahead, the dividend yield provides a cushion against potential market fluctuations.
Looking forward, StarHub’s ability to effectively implement its transformation strategy and capitalise on market consolidation opportunities will be crucial. The company’s performance will be closely watched by investors, particularly in light of the competitive pressures and evolving market dynamics in the telecommunications sector.
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