September 2014

18 September 2014
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STI = 3297.29 (+0.81)

Stock

Period

EPS cts

DPS cts

Mkt

Yield

PE

Div Breakdown

Hong Leong Fin

FY13 (Dec)

15.85

12.00

$2.670

4.494%

16.85

Interim 4ct ; Final 8ct

SGX

FY14 (Jun)

30

28

$7.210

3.883%

24.03

Q1, Q2, Q3 4ct ; Q4 4ct +12ct

SingPost

FY14 (Mar)

6.746

6.25

$1.750

3.571%

25.94

Q1, Q2, Q3 1.25ct ; Q4 2.5ct

SPH

FY13 (Aug)

27

22.0

$4.170

5.276%

15.44

Interim 7ct ; Final 8ct + Special 7ct

Note : SGX Added from May-14 ; Q4 Variable Div Depends on FY EPS


Aviation Services

Stock

Period

EPS cts

DPS cts

Mkt

Yield

PE

Div Breakdown

SATS

FY14 (Mar)

16.10

13.0

$3.050

4.262%

18.94

Interim 5ct ; Final 8ct

SIA Engineering

FY14 (Mar)

23.88

25.0

$4.560

5.482%

19.10

Interim 7ct ; Final 13ct + Special 5ct

ST Engineering

FY13 (Dec)

18.73

15.0

$3.650

4.110%

19.49

Interim 3ct ; Final 4ct + Special 8ct


Note : SIAEC Special Div is Observed to be Non-Recurring (Depends on Excess Cash)



Transport

Stock

Period

EPS cts

DPS cts

Mkt

Yield

PE

Div Breakdown

SBSTransit

FY13 (Dec)

3.62

1.80

$1.700

1.059%

46.96

Interim 0.9ct ; Final 0.9ct

ComfortDelGro

FY13 (Dec)

12.43

7.00

$2.460

2.846%

19.79

Interim 3ct ; Final 4ct

SMRT

FY14 (Mar)

4.10

2.20

$1.550

1.419%

37.80

Interim 1.0ct ; Final 1.2ct




TELCO

Stock

Period

EPS cts

DPS cts

Mkt

Yield

PE

Div Breakdown

SingTel

FY14 (Mar)

22.92

16.8

$3.760

4.468%

16.40

Interim 6.8ct ; Final 10ct

M1

FY13 (Dec)

17.4

21

$3.600

5.833%

20.69

Interim 6.8ct ; Final 7.1ct + Special 7.1ct

StarHub

FY13 (Dec)

21.50

20

$4.130

4.843%

19.21

Q1 5ct ; Q2 5ct ; Q3 5ct ; Q4 5ct




Infrastructure

Stock

Period

DPS cts

Mkt

Yield

NAV

Div Breakdown

SPAus

2H – Mar14

A4.18 (Gross)

$1.540

6.170%

A$0.90

1H14 A4.18ct ; 2H14 A4.18ct

* SPAus DPU in A$. Yield is Calculated Using Latest Exchange Rate (1.1365) fm Yahoo

NOTES :

  • Mkt Price is as on 18-Sep-14
  • ComfortDelgro : Q214 (Jun) –3.5ct
  • ST Engg : 1H14 (Jun) – 4ct
  • SBSTransit : Q214 (Jun) – 1.25ct
  • HLFin : 1H14 (Jun) – 4ct
  • SGX : Q414 (Jun14) – 4ct+ 12ct ; Q314 (Mar14) – 4ct ; Q214 (Dec13) – 4ct ; Q114 (Sep13) – 4ct
  • M1 : 1H14 (Jun) – Interim 7ct
  • SPAus : FY15 Guidance = A8.36ct Gross
  • SPAus : 2H14 (Mar14) – A4.18ct = A1.393ct (Franked) + A2.379ct (Interest – Subject to 10% Tax) + A0.408ct (Capital Returns) ; 1H14 (Sep13) – A4.18ct = A1.393ct (Franked) + A2.396ct (Interest – Subject to 10% Tax) + A0.391ct (Capital Returns)
  • SingTel : 2H14 (Mar14) – Interim 10ct ; 1H14 (Sep13) – Interim 6.8ct
  • StarHub : Q114 (Mar) – 5ct
  • SIAEC : Q414 (Mar14) – Final 13ct + Special 5ct ; Q214 (Sep13) – Interim 7ct
  • SMRT : Q414 (Mar14) – Interim 1.2ct ; Q214 (Sep13) – Interim 1ct
  • ST Engg : Dividend Payout Reduced from 90% to 80% for FY13 & Will Be Further Reduced to 75% from FY14
  • StarHub : FY14 Div Guidance – 5ct/Q
  • SingPost : Q314 (Dec13) – 1.25ct ; Q214 (Sep13) – 1.25ct ; Q114 (Jun13) – 1.25ct
  • SATSvcs : 1H14 (Sep13) – Interim 5ct
  • SPH : 2H13 (Aug) – Final 8ct + Special 7ct ; 1H13 (Feb) – Interim 7ct
  • SingTel : Div Policy – 60% to 75% of Underlying Net Profit
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Starhub – OCBC

10 September 2014
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Upgrade to HOLD on valuation

  • Hit S$4.02 low recently
  • Yield is more attractive
  • Upgrade to HOLD

 

5% slide post 2Q14 results

StarHub Ltd’s share price has seen a decline of as much as 5% after the telco posted a 6% YoY fall in 2Q14 earnings (still just 0.6% shy of our forecast), as well as lowering its FY14 service revenue guidance from single-digit growth to maintain at about 2013′s level (although it has maintained its service EBITDA margin at 32%). As mentioned in our post-results report, the move came as no surprise to us as we were already poised to pare our estimates should its broadband outlook not improve.

Upgrade to HOLD on valuation ground

Also in our previous report, we said that we would revisit the stock closer to S$4 as the yield would recover back to 5%. And true enough, StarHub recently hit a low of S$4.02. While the stock has recovered somewhat since then, we believe that at current price, its yield is still the most attractive among the three telcos. Although we are retaining our DCF-based fair value at S$3.81, we upgrade our call from Sell to HOLD on valuation ground; this as we also do not expect local interest rates to see a sharp jump in the near- to medium-term.

Prospects remain muted for now

Having said that, we note that the prospects for StarHub remains muted. Besides the still intense competition in the broadband space, the pretty saturated Pay TV space, we believe that the road to lifting mobile ARPUs is likely to be a long one, despite efforts by the telcos to monetize data usage via tiered pricing plans. A recent research by Adobe1 found that as WiFi becomes more available and a lot of mobile plans become more penalizing, people are learning how to switch over to WiFi on their phones. It added that “the telcos through their data plans are essentially teaching people how to avoid mobile data charges.”

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