Starhub / M1

Starhub / M1: Starhub will become Vodafone’s new exclusive local partner from Jan ’12, once the latter’s long standing tie-up with M1 expires at the end of this year.
StarHub and Vodafone will join hands in areas such as cellular and data roaming, a move which could potentially allow StarHub customers to enjoy standardised rates when they use their mobile phones in countries where Vodafone and its affiliates are present.
Similarly, StarHub is set to become the cellular port of call for subscribers (incl MNCs) of Vodafone and its partners when they are in Spore.
London-based Vodafone has ~382m customers globally and could provide a significant boost for StarHub's inbound roaming revenue.

While Deutsche does not believe the Vodafone partnership will significantly alter Starhub’s growth outlook, it sees the agreement as strategically positive. Cites opportunities for Starhub to strengthen its enterprise mobile service offerings and positioning by leveraging Vodafone's expertise and corporate relationships. Also expects the partnership to enhance Starhub’s roaming services given Vodafone's global footprint.
The Street has mixed ratings on Starhub with recent TP ranging btwn $2.75 – 3.27.
The stock offers 7.1% FY11E yield.

Deutsche and CIMB however, are less sanguine on M1.
CIMB estimates the end of the Vodafone alliance could shave M1's core net profit by no more than 5-10%. Believes the partnership helped drive int’l call services revenues for M1 (~13% of revenue now), while Vodafone's global branding and strong corporate positioning also enhanced M1's brand equity and strengthened its enterprise proposition. Nevertheless, the house keeps its Neutral rating with TP $2.63, on the back of the stock’s fairly attractive 6-7% div yield.
Deutsche notes that while M1 will remain a member of the Asia Mobility Initiative, which includes several regional operators, believes none of these operators offers a global network of similar scale to Vodafone's. And while mgt suggested the overall impact of the partnership annulment could be marginal (especially given the associated costs of the Vodafone partnership), believes this could still represent an additional challenge in reversing M1's recent subdued int’l revenue trends. Keeps at Sell with TP $1.90.
The stock closed at $2.43 yday, just below the $2.44-2.45 support level (bottom of the long term uptrend channel; 200 day MA). Watch for accelerating selling pressure, if share price does not return back into trend channel within the next few days. Investors who wish to time an entry may want to wait for the uptick and more clarity on the technicals, before accumulating positions.