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StarHub Ltd (SG:CC3)
SGX:CC3

StarHub (CC3) AI Stock Analysis

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SG

StarHub

(SGX:CC3)

Rating:70Outperform
Price Target:
S$1.50
▲(32.74%Upside)
StarHub exhibits stable financial performance with improving profit margins and a high return on equity, though the high leverage ratio poses a risk. The stock's technical indicators suggest mixed momentum, but the valuation is appealing with a moderate P/E ratio and high dividend yield. These factors contribute to a solid overall stock score, indicating a balanced investment with potential income and moderate growth prospects.
Positive Factors
Cybersecurity Growth
StarHub's cybersecurity venture Ensign is a profitable business and has the potential to grow at a CAGR of 20% over 2025-2027.
Stock Valuation
The stock is trading below its 5-year average while offering an attractive yield of approximately 6%.
Negative Factors
Mobile Competition
Mobile ARPU continues to suffer from intense competition, with a quarterly decline of 4.5%.
Quarterly Performance
Results were below expectations with 1Q25 revenue and EBITDA significantly lower than forecast.

StarHub (CC3) vs. iShares MSCI Singapore ETF (EWS)

StarHub Business Overview & Revenue Model

Company DescriptionStarHub Ltd, an integrated info communications company, provides communications, entertainment, and digital solutions for individuals and corporations in Singapore. The company operates in four segments: Telecommunications, Cyber Security, High Security Assurance Product, and Regional Information Communication Technology. The company provides television subscription and broadcasting services; broadband access, high speed wholesale broadband, and information security systems integration services; security consultancy services; information security and network security surveillance services; petrol station retail and fuel logistics management solutions; hospital information systems solutions; business application solutions and related services; data center and business continuity services; healthcare information technology products and services; and healthcare information technology software, research and development, and support services. It also engages in computer systems integration, other professional, scientific, and technical activities; development and supply of data security products and components; provision of information security and network security surveillance services; sales of information technology security related products; implementation of information communication technology projects; and system integration, supply and implementation of hardware and software solutions, and provision of maintenance services. Further, the company is involved in the development and provision of software as a service application; provision of architecting ICT solutions and project management services; and investment holding and provision of management services. The company was incorporated in 1998 and is headquartered in Singapore. StarHub Ltd is a subsidiary of Asia Mobile Holdings Pte. Ltd.
How the Company Makes MoneyStarHub generates revenue through multiple streams. The primary revenue source is its mobile services, which include voice, data, and value-added services provided to both consumer and enterprise customers. Additionally, the company earns income from its broadband and pay television services, offering subscription-based plans to residential and business customers. StarHub also provides enterprise solutions, including managed services, cloud computing, and cybersecurity services, contributing significantly to its earnings. Strategic partnerships with content providers and technology companies enhance its service offerings, further driving revenue growth. The company’s diverse portfolio and integrated service approach enable it to capture a broad customer base and create multiple avenues for revenue generation.

StarHub Earnings Call Summary

Earnings Call Date:May 09, 2025
(Q3-2024)
|
% Change Since: -3.42%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture with strong growth in the enterprise and broadband segments, and strategic initiatives in mobile leading to subscriber growth. However, there were challenges in mobile revenue decline and timing issues in cybersecurity revenues. The sentiment is balanced with a slight positive outlook due to anticipated recoveries.
Q3-2024 Updates
Positive Updates
Enterprise Growth
Enterprise segment showed strong performance with Network Solutions growing 9.4% year-on-year and Managed Services growing by about 25% year-on-year.
Broadband Revenue Increase
Broadband revenue grew 2.8% quarter-on-quarter. This growth was driven by the penetration of ultra-speed and high-speed plans.
Free Cash Flow and Leverage
Free cash flow remains strong at $167.2 million for 9 months 2024, with net debt-to-EBITDA reduced to 1.25x.
EBITDA and Net Profit Growth
EBITDA increased to $114.6 million for the quarter and $341.2 million for the 9 months, with net profit after tax up 11% year-on-year at $40.4 million.
Mobile Subscriber Addition
55,000 mobile subscribers were added in the third quarter, showing strong performance compared to competitors.
Negative Updates
Mobile Revenue Decline
Mobile revenue declined 5% year-on-year and 0.8% quarter-on-quarter due to competitive pressures and market dynamics.
Entertainment Segment Decline
Quarter-on-quarter and year-on-year declines in the Entertainment segment were noted, attributed to consumer cord-cutting and OTT churn.
Cybersecurity Revenue Challenges
Cybersecurity segment faced timing issues in revenue recognition, leading to missed revenue in Q3 but expected recovery in Q4.
Company Guidance
In the Q3 2024 earnings call for CC3.SI, the executives provided detailed guidance on various financial metrics and their strategic direction. The company's service revenue remained flat year-to-date, with a quarter-on-quarter decline attributed to timing issues in their cybersecurity business, Ensign. Despite this, they anticipate strong revenue recognition in Q4, maintaining their full-year forecast for year-on-year growth. The Service EBITDA showed growth, driven by high-margin enterprise segments and operational efficiencies. The net debt-to-EBITDA ratio improved to 1.25x, enhancing financial flexibility. Mobile revenue declined 5% year-on-year, but only 0.8% quarter-on-quarter, reflecting resilience compared to competitors. The company added 55,000 subscribers in Q3 and expanded its broadband subscriber base by 2.8% quarter-on-quarter. In the enterprise segment, network solutions and managed services grew 9.4% and 25% year-on-year, respectively. The executives reiterated their commitment to the DARE+ transformation, expecting to complete the spend by mid-2025, and maintaining a focus on prudent capital management and potential consolidation opportunities.

StarHub Financial Statement Overview

Summary
StarHub's financial health is characterized by stable revenue and improving profit margins, reflecting effective cost management. The balance sheet shows strong profitability with a high return on equity, although the high leverage ratio is a potential risk factor. Cash flow stability is evident, but the decline in free cash flow suggests a need for cautious capital management. Overall, the company demonstrates resilience with areas for improvement in debt management.
Income Statement
75
Positive
StarHub's income statement reveals a stable revenue with a slight decline from $2.373 billion in 2023 to $2.368 billion in 2024. The gross profit margin improved significantly from 29.5% in 2023 to 53.2% in 2024, indicating better cost management. The net profit margin also improved from 6.0% to 6.8%, showing enhanced profitability. However, the EBIT margin slightly decreased from 9.5% to 9.5%, and the EBITDA margin increased from 16.6% to 20.4%, showing mixed results in operational efficiency.
Balance Sheet
70
Positive
The balance sheet indicates a debt-to-equity ratio of 2.08, suggesting a high leverage position, which could pose a risk in volatile market conditions. The return on equity improved to 26.4% in 2024, up from 24.9% in 2023, reflecting better profitability. The equity ratio stands at 19.5%, indicating a moderate level of equity financing. Overall, while profitability is strong, the high debt level remains a concern.
Cash Flow
65
Positive
Operating cash flow showed stability, increasing slightly from $358.6 million in 2023 to $361.3 million in 2024. Free cash flow decreased from $185.9 million to $162.2 million, indicating a decline in cash available after capital expenditures. The operating cash flow to net income ratio remains healthy at 2.25, suggesting efficient cash generation relative to net income. However, the decrease in free cash flow highlights potential challenges in sustaining cash reserves.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
2.37B2.37B2.33B2.04B2.03B
Gross Profit
1.26B700.60M1.14B1.07B470.60M
EBIT
224.40M226.40M154.70M231.80M192.70M
EBITDA
481.30M393.30M400.70M513.20M539.60M
Net Income Common Stockholders
160.50M141.70M62.20M149.30M157.90M
Balance SheetCash, Cash Equivalents and Short-Term Investments
539.60M509.60M573.60M832.80M415.40M
Total Assets
3.12B3.04B3.13B3.24B2.93B
Total Debt
1.26B1.24B1.27B1.50B1.53B
Net Debt
721.10M741.70M695.30M663.90M1.11B
Total Liabilities
2.35B2.33B2.45B2.55B2.50B
Stockholders Equity
607.80M568.80M530.40M589.50M338.40M
Cash FlowFree Cash Flow
162.20M185.90M222.20M484.60M344.50M
Operating Cash Flow
361.30M358.60M383.70M657.10M535.70M
Investing Cash Flow
-101.90M-224.90M-235.00M-286.90M-237.50M
Financing Cash Flow
-221.80M-209.60M-403.60M47.80M-11.40M

StarHub Technical Analysis

Technical Analysis Sentiment
Negative
Last Price1.13
Price Trends
50DMA
1.15
Negative
100DMA
1.17
Negative
200DMA
1.18
Negative
Market Momentum
MACD
>-0.01
Positive
RSI
36.71
Neutral
STOCH
20.00
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SG:CC3, the sentiment is Negative. The current price of 1.13 is below the 20-day moving average (MA) of 1.14, below the 50-day MA of 1.15, and below the 200-day MA of 1.18, indicating a bearish trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 36.71 is Neutral, neither overbought nor oversold. The STOCH value of 20.00 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SG:CC3.

StarHub Peers Comparison

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
SGCC3
70
Outperform
$1.96B12.7140.65%5.27%-0.23%11.17%
61
Neutral
$14.60B5.95-4.32%3.69%2.76%-30.49%
$2.63B36.783.90%5.95%
$50.00B16.0516.56%4.29%
SGT41
S$44.00M10.5412.53%1.29%
* Communication Services Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
SG:CC3
StarHub
1.13
-0.06
-4.80%
NETLF
NetLink NBN
0.67
0.09
15.52%
SNGNF
Singtel
2.92
1.15
64.97%
SG:T41
Telechoice International Limited
0.10
0.04
66.67%

StarHub Corporate Events

StarHub Ltd Conducts 27th Annual General Meeting
May 25, 2025

StarHub Ltd held its twenty-seventh Annual General Meeting (AGM) at the Suntec Singapore Convention & Exhibition Centre, where a quorum was confirmed, and the meeting was declared open by Chairman Olivier Lim. The AGM served as a platform for introducing board members and key executives, while also addressing the formalities of the meeting, such as the reading of the AGM Notice, highlighting the company’s commitment to transparency and governance.

The most recent analyst rating on (SG:CC3) stock is a Hold with a S$1.30 price target. To see the full list of analyst forecasts on StarHub stock, see the SG:CC3 Stock Forecast page.

StarHub Prepares for Upcoming AGM and EGM with Shareholder Engagement
Apr 16, 2025

StarHub Ltd, a telecommunications company, is addressing shareholder inquiries ahead of its 27th Annual General Meeting and Extraordinary General Meeting scheduled for April 25, 2025. The company has provided responses to significant questions related to resolutions for approval, referencing its Annual Report 2024 and other shareholder communications. The outcomes and minutes of these meetings will be made available on StarHub’s Investor Relations website and SGXNet following the events.

StarHub Transfers Treasury Shares to Fulfill Share Awards
Mar 26, 2025

StarHub Ltd announced the transfer of 1,773,878 treasury shares on March 26, 2025, to fulfill share awards under its Performance Share Plan 2014 and Restricted Stock Plan 2024. This transfer reduces the company’s treasury shares from 11,651,805 to 9,877,927, slightly decreasing the percentage of treasury shares against the total issued shares, which reflects StarHub’s commitment to rewarding its employees and aligning their interests with shareholders.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.