StarHub’s Profitability and Higher Payouts Drive Share Gain

StarHub shares saw their largest one-day percentage gain since March 2020 on Friday, as investors welcomed improved profitability and plans for higher payouts. Despite signs of softening sales in the fourth quarter, the Singapore-based telecommunications company reported that its 2023 net profit more than doubled from the previous year. A drop in expenses and investments in its transformation plan, which includes the establishment of a 5G network, contributed to the company’s strong bottom line.

StarHub exceeded consensus expectations in a FactSet poll, and also announced an increase in full-year dividends. Although there are concerns about demand and a slight decline in mobile and broadband sales, Citi analyst Arthur Pineda expressed confidence in the company’s performance. He sees these issues as minor compared to the positive impact of a more generous dividend. Pineda reiterated his buy rating on StarHub stock, raising his target price based on the potential returns for investors as the company’s ongoing investments begin to bear fruit.

Overall, StarHub’s recent results signal a significant improvement in its profitability, despite some challenges in its operating divisions. The company’s commitment to technological advancements and its focus on enhancing shareholder value through higher payouts make it an appealing investment opportunity.

By Amanda Lee

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