SingTel - Maybank Research 2024-04-16: 42% HoldCo Discount Unfair Amid Multiple Catalysts

SingTel - 42% HoldCo Discount Unfair Amid Multiple Catalysts

SingTel (SGX:Z74) | SGinvestors.ioSingTel (SGX:Z74)
  • SingTel (SGX:Z74)’s HoldCo discount (holding company discount) has widened to 42% with key investor concerns centred on Optus and sustainability of SingTel's dividends.
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  • We also think SingTel will continue to regularly divest its stake in Bharti, in case Bharti doesn’t raise its payout meaningfully. This could result in elevated dividend payouts and/or share buyback translating to a sustainable 5-6% forward yield.

Potential Optus rejig could improve FCF/ROIC

  • Besides cyberattack and network outage, in the past 10 years, Optus weighed heavily on SingTel with its ROIC falling to just 1% while consuming ~28% of the group OPCF+associate dividends.
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  • Additionally, competition in Australia is improving and various cost rationalization initiatives are underway. We think the street is not fully appreciating this. Our Optus REV/EBITDA estimate is 3-6% ahead of street.

Bharti stake sale should be seen as regular cash-flows

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Above is the excerpt from report by Maybank Research.
Clients of Maybank Securities may be the first to access the full report in PDF @

Hussaini Saifee Maybank Research | 2024-04-16

Read also Maybank's most recent report:
2024-05-15 SingTel - Associates' Delivery May Cause Slight FY24E Earnings Miss.

Previous report by Maybank:
2024-04-29 SingTel - Correction Is A Buying Opportunity; Reiterate Buy..

Price targets by 7 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


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