- BUY Entry – 2.66 Target – 2.85 Stop Loss – 2.58
- Singtel provides an extensive range of telecommunications and digital services to consumers and businesses across Asia, Australia, Africa and the US. It serves over 753 million mobile customers in 21 countries, including Singapore, Australia (via wholly-owned subsidiary Singtel Optus) and the emerging markets of India, Indonesia, the Philippines, Thailand and Africa.
- Earnings preview. Singtel is expected to post an underlying net profit of S$2.20 bn for the fiscal year ended 31 March 2022, according to a FactSet compilation of analysts’ estimates. That compares with an underlying net profit of S$1.73 bn a year earlier, when it took massive non-cash impairment charges on its investments in two of its units. Revenue is forecasted at S$15.86 billion, according to analysts. That compares with revenue of S$15.64 billion a year earlier. Based on Singtel’s earlier announcements, its reported 2HFY22 results may be boosted by gains on the sale of its 70% stake in Australia Tower Network of $538 million and 1.6% stake in Airtel Africa of $34 million. The market will likely focus on developments relating to its digital banking license in Malaysia, after the country’s central bank awarded a digital banking license to a joint venture between Singtel and Grab Holdings Ltd. in late April.
- Singtel will be announcing its results for the second half and financial year ended 31 March 2022 on 27 May 2022, before the start of trading on the Singapore Exchange.
- Rumoured Bharti Airtel stake sale. Yesterday, Business Times reported that Singtel has initiated talks with Bharti Airtel chairman Sunil Mittal, to potentially sell a “small” part of its holding in the Indian telco to the Mittal family. The transaction could be worth about US$1-2 billion through a mix of both Bharti Telecom and Bharti Airtel shares – although the quantum and details of the transaction have yet to be worked out. Selling US$1 billion of Bharti Airtel shares is estimated by the Indian daily to reduce Singtel’s holding by close to 2%, to less than 30%, while divesting shares worth US$2 billion would reduce Singtel’s holding by 4%.
- Positive street view. Consensus has an overall positive outlook on Singtel, with 16 BUYS, 2 HOLDS, 0 SELL, and a 12m TP of S$3.13, implying an upside of 14.7% as of 26 May 2022
(Source: Bloomberg)