SingTel - UOB Kay Hian 2025-01-21: On Track To Continue Driving Shareholder Value

• SingTel (SGX:Z74) has improved its ROIC from 8.3% in FY24 to around 9% currently, higher than its WACC of around 7%.
• SingTel's management expects ROIC to continue its upward momentum towards its medium-term goal of low double-digit percentage in three years’ time, largely driven by
  1. - Read this at SGinvestors.io -
  2. its ongoing cost-out programme,
  3. better contributions from its regional associates and
  4. strong revenue growth from NCS and Nxera (infrastructure company).

Potential S$10b value unlocking exercise…

• SingTel’s value-unlocking initiatives remain on track. As a recap, management previously noted that the group identified about S$6b of capital recycling in the medium term which we reckoned would likely come from paring down its stakes in its regional associates and non-core fixed assets.
• - Read this at SGinvestors.io -
• Also, SingTel has identified about S$1b in non-core fixed assets and S$3b in assets from Thailand to monetise, which we reckon comes from paring down its stake in NewCo.
• Furthermore, SingTel would gain roughly S$1b in cash in FY26 from the redevelopment of the Singtel Comcentre. Therefore, we estimate that the group now has S$12b-13b in monetisable assets that could be returned to shareholders.

…for higher value-realisation dividends.

• Read more at SGinvestors.io.

Chong Lee Len UOB Kay Hian Research | Llelleythan Tan Yi Rong UOB Kay Hian Research | https://research.uobkayhian.com/ 2025-01-21 SGinvestors.io

---