- 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.
- - Read this at SGinvestors.io -
- 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.
- - Read this at SGinvestors.io -
- 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
- Read more at SGinvestors.io.
