Broker: DBS Bank Ltd
Date of Report: 27 July 2026

Excerpt from DBS report.

Report Summary

• StarHub (SGX: CC3)
  • Action: Upgraded to BUY
  • Target Price: SGD 1.40
  • Key Idea: High likelihood of a potential consolidation with M1 supports a recovery in mobile ARPU starting 2027. Estimated annual synergies of SGD65-75mn (about 9–11% of combined 2026 EBITDA) could add SGD0.32–0.38 per share to StarHub’s valuation. If the merger does not materialize, the target price could drop by SGD0.35 to SGD1.05.
  • Rationale: The StarHub-M1 merger would drive cost savings, mainly through staff rationalization and retail consolidation; network synergy potential is limited due to existing network sharing in Singapore. The deal is expected to be EPS accretive by the second year post-merger. A key risk is the merger not materializing.
  • Implication: Investors should monitor for merger news as it could lift share price, but the extraction of synergies from 2027 is expected to be the main driver of sustained share price gains.
• Singtel (SGX: Z74)
  • Action: Maintain BUY
  • Target Price: SGD 5.46
  • Key Idea: Singtel stands to benefit from industry consolidation without direct involvement in the merger. Four potential catalysts—minority stake sale in Optus, IPO of Singapore data centre, exit from Gulf Development, and further selldown of Bharti Airtel—could narrow its HoldCo discount from 22% to 10% and support a re-rating of shares.
  • Rationale: Singtel’s ARPU is expected to recover from FY28, with higher industry ARPU flowing through to earnings due to its high operating leverage and fixed cost base.
• SIMBA
  • Key Idea: SIMBA’s low-capex, low-ARPU model is unsustainable, with rising capex pressures from 5G and cybersecurity. This could either lead to market consolidation or leave SIMBA as a high-capex, low-cashflow operator, both scenarios supportive of ARPU growth for incumbents.

Summary of Actionable Insights:

• Investors should focus on StarHub (BUY, TP: SGD 1.40) for potential merger-driven upside and synergy realization from 2027 onward.
• Singtel (BUY, TP: SGD 5.46) remains attractive for a narrowing HoldCo discount and ARPU recovery, with potential upside from several corporate actions.

Above is an excerpt from a report by DBS Bank Ltd. Clients of DBS Bank Ltd can access the full research report from the broker’s website: DBS Bank Ltd research website.