Telcos: Enterprise and data analytics are key focus areas for StarHub and Singtel, with the former looking to mount a challenge to the latter's leadership in the segment. While enterprise does represent an opportunity for StarHub, it will require significant capex and is unlikely to result in meaningful growth in the short to medium term.
Next, the potential entry of a fourth telco remains and will be an overhang over 2015. Hence, CLSA raised its WACC for all three telcos by 40bps, which led to lower TPs for all three telcos.
The house prefers Singtel (Outperform, TP $4.41); M1 (Underperform, TP $3.35) while StarHub remains at SELL (TP $3.68).
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