Report Date: October 24, 2024
Broker: CGS International

Company Overview

SingTel (Singapore Telecommunications Limited) is a leading telecommunications company based in Singapore. It operates in multiple markets across Asia, providing a range of telecommunication services including mobile, broadband, and digital solutions. The company is known for its extensive regional footprint and strategic investments in key markets.

Strong EBIT Growth in 1H

The report maintains an “Add” rating on SingTel, citing strong earnings before interest and tax (EBIT) momentum in the first half of the fiscal year. The company has shown resilience and growth in its core operations, with a focus on maintaining profitability across its regional operations.

Target Price and Investment Recommendation

• Target Price (TP): S$3.70
• Rating: Maintain “Add”

CGS International sees sustained EBIT growth as a key driver for SingTel’s performance. The report notes that the company has been able to leverage its regional presence to sustain earnings, despite market challenges.

Key Drivers and Outlook

1. Strong Operational Efficiency: SingTel has maintained a robust focus on operational efficiency, which has helped drive strong EBIT growth in the first half. The company’s efforts in streamlining operations and optimizing costs have contributed to its solid performance.
2. Regional Presence and Diversification: With a significant presence across multiple Asian markets, SingTel benefits from a diversified revenue base. This regional diversification allows it to capture growth in emerging markets while sustaining performance in its mature markets.
3. Positive Earnings Momentum: The company’s ability to sustain its EBIT growth trajectory is seen as a positive signal for future earnings stability and expansion. The report highlights that this momentum is likely to continue, supporting the overall bullish outlook on the stock.

Conclusion

The broker maintains an optimistic outlook for SingTel, supported by its strong EBIT performance and strategic regional operations. With a target price of S$3.70, CGS International believes that the stock is well-positioned for continued growth, making it an attractive investment for those seeking exposure to the telecommunications sector in Asia.