StarHub: Macquarie downgrades to Neutral from O/P and reduce TP to $2.72 from $2.97. Note that as a yield play, grp still offers an expected div yield of 7.5%, which is attractive to investors seeking a safe haven. However, see limited upside until evidence of lower acquisition costs and/or a sharp take-up of the NGNBN services. Div sustainable but minimum upside expected…..
Prefer M1, rate O/P with TP of $2.78 to StarHub because of a combination of its cheaper valuation and stronger balance sheet. Grp trades at a slight premium of 14.1x 2011E PER vs M1’s 13.3x. also M1 has a lower level of gearing embedded in net working capital and other liabilities.
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