Singtel - Maybank Research 2025-05-23: Capital Return In High Gear; HoldCo Discount Should Narrow

• We reiterate our BUY on Singtel and raise our SOTP-based Singtel's target price to S$4.30 factoring in a 20% holdco discount (from 25% previously). We believe, Singtel’s holding company discount at 25-30% should narrow in light of improved operational performance, tight execution and clear and higher capital return initiatives.
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On firm footing – 5 out of 8 business segments.

• Out of Singtel’s 8 businesses (4 core, 4 associates), 5 are on a firm footing.
  • - Read this at SGinvestors.io -
  • NCS’ bookings are up 5% y-o-y in FY25, which in turn paves the way for firm FY26 growth despite macro/trade uncertainty.
  • Nxera growth should benefit from the ramp up of data centers in Thailand and Singapore where 50- 80% of capacity is already presold.
  • Among associates, Airtel and AIS are forecast to deliver 20-25% PBT growth in 2025/FY26, helped by stable competition and operating leverage.
  • We see Globe, Telkomsel and Singapore mobile facing competitive and growth challenges. There is potential for competition to subside in Indonesia with telcos looking to raise starter packs to IDR30k/mth. Globe’s telco business slowdown remains a concern, but, its contribution is relatively small at 9% of group earnings while Globe’s fintech business, GCash, continues to progress well, offsetting telco weakness.

Cautious approach to growth investments.

• Read more at SGinvestors.io.

Hussaini Saifee Maybank Research | https://www.maybanktrade.com.sg/ 2025-05-23

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