StarHub Ltd posted FY12 results that were mostly in line, where revenue rose 4.7% to S$2421.6m, or just 0.8% above our figure, while net profit jumped 13.9% to S$359.3m, and 2.5% above our estimate. Full-year dividend came in at S$0.20 as guided. For FY13, StarHub expects to see single-digit revenue growth, with EBITDA margin on service revenue likely to be about 31% (versus 32.3% in FY12). StarHub says it also intends to maintain its annual cash dividend of S$0.20/share, or S$0.05 per quarter. However, it raised its capex guidance to ~13% of operating revenue (versus 11% in FY12), which includes the payment of the leasehold land and the construction of its cable TV network transmission centre. Separately, StarHub announced that CEO Neil Montefiore will retire by end of Feb; COO Tan Tong Hai will step up to replace him in Mar. Biggest change to our model would be the increased capex guidance, otherwise, we are keeping our FY13 revenue and earnings largely unchanged. However, as we are pushing out DCF valuation to FY13 to FY16, our fair value improves from S$3.75 to S$4.00. But given the limited upside from here, we keep our HOLD rating.
4Q12 results mostly in line
StarHub Ltd posted 4Q12 revenue of S$654.1m (+6.8% YoY, +11.6% QoQ), or 2.9% above our forecast, net profit fell 5.0% YoY and 8.6% QoQ to S$87.9m, but was still 11.1% above our estimate. However, we note that StarHub had a lower-than-usual tax expense (14.1% rate versus 17.7% in 3Q12 and 15.8% in 4Q11). As expected, StarHub has declared a quarterly dividend of S$0.05/share. For the full-year, revenue rose 4.7% to S$2421.6m, or just 0.8% above our figure, while net profit jumped 13.9% to S$359.3m, and 2.5% above our estimate. Full-year dividend came in at S$0.20 as guided.
Higher capex guided for 2013
For FY13, StarHub expects to see single-digit revenue growth, with EBITDA margin on service revenue likely to be about 31% (versus 32.3% in FY12); this may be due to likely rising content cost for its Pay TV business. It has however raised its capex guidance to ~13% of operating revenue (versus 11% in FY12), which includes the payment of the leasehold land and the construction of its cable TV network transmission centre. Lastly, StarHub says it intends to maintain its annual cash dividend of S$0.20/share, or S$0.05 per quarter.
Change of CEO from Mar
Separately, StarHub announced that CEO Neil Montefiore will retire by end of Feb; this comes as a bit of a surprise, given that he only joined them in Jan 2010 (not long after leaving M1 as its CEO). But as current COO Tan Tong Hai will step up as CEO in Mar, we do not expect to see any disruption in its operations nor strategy.
Raising FV to S$4.00
Biggest change to our model would be the increased capex guidance, otherwise, we are keeping our FY13 revenue and earnings largely unchanged. However, as we are pushing out DCF valuation to FY13 to FY16, our fair value improves from S$3.75 to S$4.00. But given the limited upside from here, we keep our HOLD rating.
StarHub Ltd posted 4Q12 revenue of S$654.1m (+6.8% YoY, +11.6% QoQ), or 2.9% above our forecast, net profit fell 5.0% YoY and 8.6% QoQ to S$87.9m, but was still 11.1% above our estimate. However, we note that StarHub had a lower-than-usual tax expense (14.1% rate versus 17.7% in 3Q12 and 15.8% in 4Q11). As expected, StarHub has declared a quarterly dividend of S$0.05/share. For the full-year, revenue rose 4.7% to S$2421.6m, or just 0.8% above our figure, while net profit jumped 13.9% to S$359.3m, and 2.5% above our estimate. Full-year dividend came in at S$0.20 as guided.
Higher capex guided for 2013
For FY13, StarHub expects to see single-digit revenue growth, with EBITDA margin on service revenue likely to be about 31% (versus 32.3% in FY12); this may be due to likely rising content cost for its Pay TV business. It has however raised its capex guidance to ~13% of operating revenue (versus 11% in FY12), which includes the payment of the leasehold land and the construction of its cable TV network transmission centre. Lastly, StarHub says it intends to maintain its annual cash dividend of S$0.20/share, or S$0.05 per quarter.
Change of CEO from Mar
Separately, StarHub announced that CEO Neil Montefiore will retire by end of Feb; this comes as a bit of a surprise, given that he only joined them in Jan 2010 (not long after leaving M1 as its CEO). But as current COO Tan Tong Hai will step up as CEO in Mar, we do not expect to see any disruption in its operations nor strategy.
Raising FV to S$4.00
Biggest change to our model would be the increased capex guidance, otherwise, we are keeping our FY13 revenue and earnings largely unchanged. However, as we are pushing out DCF valuation to FY13 to FY16, our fair value improves from S$3.75 to S$4.00. But given the limited upside from here, we keep our HOLD rating.
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