SingTel - Maybank Research 2023-08-29: All-in To Drive ROIC To Low Double Digit By FY2026

• We attended the recent SingTel Investor Day where management re-iterated its commitment to improve ROIC (which is tightly coupled with SingTel's share price) to low double-digits by FY26 (FY23: 8%) by:
  1. - Read this at SGinvestors.io -
  2. reducing its capital intensity further via better management of 5G rollout and more prudent spending,
  3. leveraging on positive price momentum in Airtel to grow ARPU and
  4. unlocking value from asset recycling and capital partnerships to fund growth investment.
• SingTel also intends to drive EBITDA growth at both NCS and Regional Data Centre (RDC) as it expects these growth engines to account for more than 20% of its EBITDA by FY28E (FY23: 12%).
• - Read this at SGinvestors.io -

Rationalising growth for NCS

• Following 3 levers of growth (client industries, services and geographies) and expanding into Australia through recent acquisition, NCS targets to improve its revenue from FY23’s S$2.7bn to S$5.0bn by FY26E.
• NCS remains focused on expanding into
  1. enterprise (non-government) projects, and
  2. overseas projects (particularly Greater China and Australia).
• Management sees longer-term tailwinds from enterprise digitalisation trends, and commented that its bookings momentum is growing quickly from its expansion initiatives.

Attractive opportunity in data centre

• Read more at SGinvestors.io.

Kelvin Tan Maybank Research | https://www.maybank-ke.com.sg/ 2023-08-29 SGinvestors.io

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