SG Telecom Sector - RHB Invest 2024-01-17: Some Positive Vibes; Astute Stock-picking Still Key

SG Telecom Sector - Some Positive Vibes; Astute Stock-picking Still Key

SingTel (SGX:Z74) | SGinvestors.ioSingTel (SGX:Z74) STARHUB LTD (SGX:CC3)
  • We see the stronger GDP growth and peaking interest rates as supportive of Singapore’s telecommunications sector (SG telcos) in 2024F. Sector FY24F EV/EBITDA of 9.4x is fair (-1 standard deviation from historical mean), given the mature stage of the market, and at a premium to the ASEAN-4 average of 6x. This is justified, in part, by superior yields.

Earnings momentum and dividend outlook.

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  • SG telcos continue to offer the highest dividend yields among the ASEAN-4 telcos, at 5.5% on average for FY24F. This compares with the 4% in Malaysia, 2.7% in Indonesia, and 3.5% in Thailand. See SingTel's dividends, StarHub's dividends.

Roaming recovery gathers pace.

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  • Overall, industry blended mobile ARPU (9M23: +3.3% y-o-y) should be supported by stronger 5G monetisation and rational competition.

SingTel (SGX:Z74) – Stronger ROIC, dividend upside.

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Singapore Research RHB Securities Research | 2024-01-17

More views on outlook of telecom sector:
Analyst Reports on Singapore Telecom Sector


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