Starhub target lifted to $2.85 by BNP, keeps Buy

Written by The Edge


Friday, 27 August 2010 12:05

BNP Paribas lifts Starhub (CC3.SG) target price to $2.85 from $2.65, based on discounted cash-flow valuation, after accounting for lower pay-TV churn rate assumption, rolling over valuation base to 2011 vs 2010, says Dow Jones.

BNP says despite losing EPL football broadcast rights to SingTel (Z74.SG), Starhub’s pay-TV churn rate only slightly higher than before EPL loss. “StarHub’s non-sports content remains superior to SingTel’s.” Lowers 2010 pay-TV churn rate estimate to 10% vs 15%. Keeps Buy call.

Notes, “StarHub’s prospective (dividend) yield of 8.5% is attractive, especially in current volatile market environment.”