Singapore Telecommunications (ST SP)

FY21: Missed Expectations; Strategic Reset To Bridge Valuation Gap
Singtel delivered 2HFY21 core earnings of S$896m, improving 7% from 1HFY21 but down 22% yoy. FY21 core earnings of S$1.7b accounts for 92% of our full-year estimates, slightly missing expectations. Singtel has guided a dividend policy of 60-80% core earnings payout in the near term to conserve cash for future growth. As such, we trim our dividend forecast to 10.0/11.25/12.5 S cents for FY22-24, translating to 4-5% dividend yield. Maintain BUY and a target price of S$2.84.