StarHub Shares Sink as Profit Halves and 2026 Outlook Underwhelms

The stock slid 4.2% to S$1.15 in early Singapore trading following the announcement that net profit for the six months ended December fell to S$38.5 million (US$30.5 million). Revenue for the period also slipped 3.1% to S$1.22 billion, as the company grappled with intense competition in the city-state's mobile and broadband markets.

StarHub Chief Executive Nikhil Eapen attributed the performance to "prolonged price pressure" within the domestic telecommunications sector. According to Eapen, these market dynamics continue to strain returns and dictate the pace of infrastructure investment. The company's consumer business remains particularly vulnerable to aggressive pricing from rivals, a trend that shows little sign of abating.

A Dimmer Outlook for 2026

The operator’s forward-looking guidance further pressured the stock. StarHub expects its 2026 earnings before interest, taxes, depreciation, and amortization (EBITDA) to reach only 75% to 80% of its 2025 levels. While the company aims to mitigate this decline through its managed services division, it plans to allocate 13% to 15% of its 2026 revenue toward capital expenditure, focusing on cybersecurity and network upgrades.

The conservative forecast caught market observers off guard. Analysts at Citi noted that the guidance effectively erases optimism surrounding potential industry consolidation, such as the proposed merger between M1 and Simba Telecom. Consequently, Citi removed its 90-day "upside catalyst watch" on the stock, suggesting that a reduction in market competition may not provide the immediate relief investors had anticipated.