StarHub Ltd - OCBC Investment 2016-05-31: Adds cyber security to capabilities

StarHub Ltd - OCBC Investment 2016-05-31: Adds cyber security to capabilities STARHUB LTD CC3.SI 

StarHub Ltd: Adds cyber security to capabilities 

  • Jointly investing S$200m in COE
  • E-commerce set to surge
  • Need for more robust cyber security measures

Cyber security Centre of Excellence 

  • StarHub Ltd recently announced that it will jointly invest S$200m over the next five years to set up the Cyber Security Centre of Excellence (COE); this to grow the local cyber security eco- system.
  • Together with its partners – including Nanyang Polytechnic, Republic Polytechnic, Temasek Polytechnic, the Singapore University of Technology and Design, and five industry partners, namely Blue Coat, Cyberbit, Fortinet, Wedge Networks, and EY – the COE will serve as a hub to bring together the best of brains and expertise to tackle cyber threats.

Going beyond traditional telco business 

  • StarHub will undertake various initiatives to strengthen Singapore’s capabilities in cyber security, focusing on talent development, innovation and industry partnerships. 
  • StarHub adds it is committed to training at least 300 specialists in different cyber-related capabilities over the next five years. 
  • As a first step, StarHub and NYP have jointly established a lab on NYP campus to provide hands-on training for students of Cyber Security & Forensics. 

Growing e-commerce market in Singapore 

  • The latest move by StarHub to venture into cyber security comes at an opportune time, given the budgeoning e-commerce market potential, not only here in Singapore but around the region. 
  • According to a recent report by Google and Temasek, the e-commerce market in Singapore is expected to be worth US$5.4b by 2025, up over 5x from US$1b in 2015, driven by online shopping. The report also expects the Internet economy in South-east Asia to exceed US$200b by 2025. 
  • And as the volume of e- commerce grows, we believe that this will be accompanied by the need for more and more robust cyber security measures, both to safeguard the consumers and the corporates. 

Maintain BUY with S$3.69 fair value 

  • The latest move shows that StarHub is evolving its business model from a pure carrier towards more value-added services, which are less likely to be “commoditized”. 
  • Maintain BUY on StarHub with an unchanged S$3.69 fair value.

Carey Wong OCBC Securities | 2016-05-31
OCBC Securities SGX Stock Analyst Report BUY Maintain BUY 3.69 Same 3.69