Starhub

[KopiKat]

Starhub will increase its dividends by another 4 cts to 24 cts.

Kim Eng is using a DDM model to arrive at their valuation. How accurate is their forecast of 24c dividend for next year? What is Starhub's capital commitments for 4G and LTE? It's better to crystallize these facts before investors get too optimistic.

The Kim Eng report is actually recommending a SELL as they'd revised from their previous analysis. Previously, they'd projected a high possibility of an increase in dividend from 20ct to 24ct. But, now, they're saying the coming 4G spectrum auction in 1H13, will eat up all the extra cash flow, so, they now think it's highly unlikely Div will be increased.