SG Telcos

SG Telcos: The higher prices of three new major handsets launched last week confirmed Maybank-KE's view that handset subsidies would decline this year, translating to an upside to EBITDA margins. This year’s subsidy reduction is the highest yet in recent years. We therefore maintain that margin guidance by the telcos, in particular StarHub, is conservative and anticipate further upside. Maybank-KE maintains Neutral on the sector with preference on M1 (Buy with $3.45 TP) for likelihood of a special dividend.