Brokers' take

StarHub | Hold Target price: S$1.55 August 7 close: S$1.45 DBS Group Research, August 7

Q2 2019 earnings of S$39.5 million (-37 per cent year-on-year (y-o-y)) was in line with our expectations. Earnings were primarily driven by lower losses in the cybersecurity segment. Cybersecurity losses narrowed to S$0.8 million over Q2 versus a loss of S$11.4 million in Q1, with the absence of one-off costs from the formation of the Ensign joint venture and set-up costs recognised over Q1. 1H 2019 earnings accounted for about 51 per cent of our FY 2019 forecast.

StarHub is seemingly cheap after a 15 per cent year-to-date contraction, trading at a 12-month forward EV/Ebitda (enterprise value to earnings before interest, tax, depreciation and amortisation) and PE (price-to-earnings) of 6.6 times and 13.6 times respectively, near -2 standard deviation on both metrics.