DBS Group Research has downgraded StarHub from a “buy” to a “hold” recommendation, citing increased competition in the mobile sector as a key factor. The revised 12-month price target is now SGD1.20, down from SGD1.38, reflecting a 2% downside from its last traded price of SGD1.23 on 6 August 2025. Analyst Sachin Mittal highlighted that the downgrade is driven by the aggressive pricing strategies of competitors, notably M1, which has introduced ultra-low-cost SIM-only plans.
The competitive landscape has intensified with M1’s Maxx plans, offering 290GB for SGD7.90, significantly undercutting StarHub and Singtel’s offerings. This has pressured the average revenue per user (ARPU) and margins within the mobile sector. StarHub may need to adjust its pricing strategies to maintain market share, despite its enterprise and managed services segments showing resilience.
DBS anticipates that StarHub’s earnings will benefit from the absence of transformation costs by FY26F, projecting an 11% compound annual growth rate in earnings from FY25F to FY27F. The company’s DARE+ transformation programme aims to enhance its digital platform capabilities, with meaningful results expected from FY26F.
The potential divestment of StarHub’s cybersecurity venture, Ensign, could also impact its financial outlook. Ensign, which could be valued at SGD0.33 per share, has the potential to grow at a 20% CAGR over 2025-2027. StarHub holds a 55.73% stake in Ensign, with the option to divest to Temasek after 4 October 2025.
DBS’s revised valuation approach for StarHub’s core business, excluding Ensign, now uses a price-to-earnings ratio due to reduced earnings visibility. The core business is valued at SGD0.87 per share, whilst Ensign is conservatively valued between SGD0.25 and SGD0.41 per share. The report suggests a high likelihood of sector consolidation within the next 12-15 months, which could reshape the competitive dynamics in Singapore’s telecom market.
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