SG Telecom: CS prefer SingTel over StarHub and M1. Assume O/p on SingTel (TP $3.75) and Neutral on StarHub (TP $2.85) and M1 (TP 2.80).
House bullish on Singtel key regional associates — Bharti, Telkomsel, AIS and Globe. Expect FY3/11-14E associate contribution CAGR of 23% to drive earnings. The key near-term risk to forecasts is currency. Expect StarHub to benefit from the faster progress at NGNBN and to deliver strong profit growth in FY12-13, but it is already known and has been priced in.
M1 is set to be the key beneficiary from NGN in the longer term but aggressive growth strategy could put pressure on its near-term margins.
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