SingTel - Maybank Research 2022-02-16: On The Verge Of Recovery

SINGTEL (SGX:Z74) | SGinvestors.io SINGTEL (SGX:Z74)

SingTel - On The Verge Of Recovery

PATMI in line with expectations; Maintain BUY

  • SingTel (SGX:Z74)'s 3QFY22 core PATMI of S$1,688m (+37% y-o-y) was broadly in line with street/slightly behind MIBG estimate, driven by the expansion of consumer business across Singapore and Australia. Associates’ pre-tax profits rose (+17% q-o-q, 20% y-o-y) as Airtel demonstrated sustained profit turnaround with strong performance in both India and Africa.

Recovery proves challenging

  • SingTel's 9MFY22 consolidated group revenue fell to S$3,913m (-7.7% q-o-q) on lower NBN migration revenue and equipment sale while EBITDA rose 6.1% q-o-q.
  • Singapore mobile service revenue was stable with more adoption of higher ARPU 5G plans and higher roaming from increased international travel. Though Optus operating revenue fell 11% y-o-y, EBITDA rose steadily on healthy growth (+5.1%) in mobile.
  • Group Enterprise operating revenue fell (-3.1% q-o-q, -0.9% y-o-y) attributed to lower usage and pricing pressures in its legacy carriage business.
  • NCS’ revenue rose (6.4% q-o-q, 8.3% y-o-y) driven by various growth engines (Digital, Cloud, Platforms and Cyber) which contribute 49% of operating revenue. NCS’ bookings amounted to a strong S$611m with a pipeline of projects in various sectors.

Regional associates continue to be resilient

  • Pre-tax contributions from SingTel's regional associates rose (16.4% q-o-q, 19.6% y-o-y) driven by Bharti Airtel (BHARTI IN, Current Price: INR711, BUY, Target price: INR890). Airtel posted Typhoon Odette and weaker consumer spending due to COVID-19.

Capturing digital growth

Kelvin Tan Maybank Kim Eng Research | https://www.maybank-ke.com.sg/ 2022-02-16
SGX Stock Analyst Report BUY MAINTAIN BUY 2.98 UP 2.830