SingTel - RHB Invest 2024-07-19: A Rising Tide; Reiterate BUY

• A spate of positive developments has catalysed the strong re-rating of SingTel's share price in recent weeks. We see earnings tailwinds lifting SingTel's return on invested capital (ROIC) to the double-digit territory in FY25F.
• - Read this at SGinvestors.io -
• SingTel remains our preferred Singapore telco pick.

Earnings momentum to pick-up; ROIC upside.

• SingTel's share price has re-rated by nearly 20% over the past month, supported by:
  1. the growing conviction of its earnings construct,
  2. - Read this at SGinvestors.io -
  3. market price repair with the hardening of mobile tariffs across Australia and India, and
  4. news of additional sell down on the shares of associate, Airtel.
• We see stronger cost rescaling and synergies from the consolidation of the Singapore enterprise business and Optus (part of the S$0.6m in targeted cost savings into FY26F) from 2QFY25 fuelling earnings momentum. This should help lift SingTel's ROIC to ~ 10% in FY25F and ~11.3% in FY26F (FY24: 9.3%).

9% stake in larger NewCo under Thai amalgamation exercise; potentially higher stake in AIS.

• Read more at SGinvestors.io.

Singapore Research RHB Securities Research | https://www.rhbgroup.com/ 2024-07-19 SGinvestors.io

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