SingTel - Upward Earnings Revision After A Long Time

SingTel - DBS Research 2022-07-19: Upward Earnings Revision After A Long Time

SingTel - Upward Earnings Revision After A Long Time

SGinvestors.io

Published: 2022-07-22 12:13 AM

SINGTEL (SGX:Z74)

We raise our FY23F/24F earnings for SingTel (SGX:Z74) by 5%/4% on potential classification of Amobee and Trustwave as “held for sale” subsidiary.
- According to Sky News, Amobee might be sold to London-Listed adtech firm Tremor for an estimated GBP165m (S$280m). Amobee has been largely loss-making (S$70m in EBIT loss in FY22). Furthermore, as Amobee is in advance stage of sale, Amobee might be classified as a subsidiary that is “held for sale” from 1QFY23F onwards; therefore, its revenue and earnings will not be captured from FY23F onwards in SingTel’s reported profit.
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In early Jul 2022, Optus has raised the price of Optus-choice plans by A$4 for existing subscribers, which translates to about a 10%-15% on an average ARPU of A$31. Telstra had raised the mobile tariffs by A$4 across all its plans in the beginning of July. The last tariff increase by Optus in May 2021 was not applicable to existing subscribers who had joined before May 2021. This July upward revision will be applicable to subscribers who joined before May 2021 which will further boost ARPU growth. The price of all tier plans – from the A$39 per month tier offering 10GB of data to the A$79 per month tier offering 120GB – will be increased from 8 August along with an increase on the data allowance on these plans as well.
SingTel has begun its growth journey while paying healthy dividends to its shareholders. Core business segments in Singapore and Australia saw a tumultuous period during the lockdowns and are gradually recovering following the resumption of foreign travel.
SingTel should be less reliant on the Singapore economy compared to local banks in Singapore who offer similar growth. Furthermore, increasing contribution from associates will further support the telco’s earnings growth, making SingTel an exciting stock that offers a better mixture of growth and yield. At current SingTel's share price, it offers a yield of over 4.0%.
Maintain BUY call on SingTel with a higher target price of S$3.24.
- Read more at SGinvestors.io.
Above is the excerpt from report by DBS Group Research.
Clients of DBS may access the full report in PDF @ https://www.dbs.com/insightsdirect/.

Sachin MITTAL DBS Group Research | https://www.dbs.com/insightsdirect/ 2022-07-19 SGinvestors.io

Read also DBS's most recent report:
2024-02-26 SingTel - Focus On Core Operating Profit Trajectory.
Previous report by DBS:
2024-01-26 SingTel - 2 Reasons To Expect A Rally, Finally.
Price targets by 6 other brokers at SingTel Target Prices.
Listing of research reports at SingTel Analyst Reports.
Relevant links:
SingTel Share Price History,
SingTel Announcements,
SingTel Dividends & Corporate Actions,
SingTel News Articles

SingTel Share Price vs STI Performance

SingTel - DBS Research 2022-07-19: Upward Earnings Revision After A Long Time

SingTel - Upward Earnings Revision After A Long Time

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