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SINGAPORE : HSBC said in a report released on Tuesday that Singapore telco stocks are attractively priced.
It has assumed coverage of the local telecom sector with a neutral recommendation on SingTel and M1, while maintaining an overweight status on StarHub.
HSBC said its StarHub target price of S$2.92 is 28 per cent above consensus as it believes the management will raise payouts.
The bank said StarHub will continue to provide the best yield despite industry challenges.
Meanwhile, HSBC said it has a non-consensus view on M1 as it believes the market has priced in its broadband market share gains but perhaps not the related expenses and margin pressure.
However, it does not think this move into a more competitive terrain will jeopardise M1's dividend policy.
HSBC added that SingTel will find new growth a challenge and has the lowest cash dividend yield of the three stocks.
However, the bank believes that relative to associate Bharti and Australia competitor Telstra, SingTel should continue to perform well because of the defensive nature of its portfolio.
- CNA/al
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