CGS International Securities
August 13, 2025

SingTel Delivers Steady 1Q26 Performance: Key Results, Valuation, and ASEAN Telco Sector Comparison

Introduction: SingTel’s 1Q26 Results in Focus

SingTel, Singapore’s leading integrated telecommunications provider, has released its 1QFY3/26 results, revealing a performance largely in line with market expectations. The company posted a core net profit of S\$686 million, up 13.8% year-on-year, representing 25% of full-year forecasts. This report, compiled by CGS International Securities, provides an in-depth analysis of SingTel’s latest financials, competitive landscape, key risks, and a comprehensive comparison with major ASEAN telcos.

SingTel 1QFY26: Performance Highlights

• Core Net Profit: S\$686m (+13.8% YoY), 25% of FY3/26F estimates
• EBITDA: S\$990m (+1.3% YoY, +9.8% QoQ)
• EBIT: S\$418m (+9.4% YoY, +39.6% QoQ)
• Associate Pretax Contributions: S\$664m (+17.1% YoY)
• Dividend Yield: 5.1% forecast for FY26F
• Valuation: 23.2x FY26F P/E, seen as fairly valued; Hold rating maintained with a S\$4.10 target price

Segment Analysis: Singapore, Optus, Associates

Singapore Operations

• EBIT increased by 4.1% YoY despite an 11% drop in mobile revenues, primarily due to lower roaming revenue from bundled roaming plans since 2H 2024.
• Singapore’s mobile segment faces ongoing pricing pressures, with competitive dynamics expected to intensify following the proposed Simba-M1 merger.

Optus (Australia)

• Optus posted a 36% YoY rise in underlying EBIT (constant currency), although a 6.6% decline in the AUD limited EBIT growth to 28% in SGD terms.
• Continued operational improvements are noted, in line with expectations.

Associate Companies

• Pretax contributions from associates rose 17% YoY, boosted by Bharti Airtel’s strong performance (+109% YoY) despite the deconsolidation of Intouch.
• Potential asset monetization is on the horizon, as SingTel considers paring its Bharti Airtel stake to align with the Mittal family’s shareholding, which could unlock S\$1.2 billion (S\$0.07 per SingTel share) in value.

Key Financial Results Table

Valuation and Dividend Outlook

• Hold rating reaffirmed, with a target price of S\$4.10 per share, based on a 25% holding company discount to RNAV estimates.
• Dividend yield: 5.1% for FY26F, providing downside support to the share price.
• Valuation multiples: 23.9x FY25F P/E and 21.4x FY26F P/E; P/BV at 2.4x (FY25F) and 2.3x (FY26F).
• Upside catalysts include significant asset monetization or sharp increases in operating profits in key markets, while downside risks are linked to currency fluctuations, competitive pressures, and regulatory changes.

ASEAN Telco Valuation Comparison

SingTel’s Financials at a Glance: Key Trends and Drivers

• Net profit is projected to reach S\$4,930m in FY26F and S\$3,108m in FY27F.
• Core EPS is expected to grow by 12.7% in FY26F and 11.6% in FY27F.
• Dividend per share is forecasted at S\$0.20 (FY26F) and S\$0.21 (FY27F), with yields of 5.06% and 5.37% respectively.
• Revenue growth is projected at 2.85% in FY26F and 4.36% in FY27F.
• Operating EBITDA margin is expected to expand from 26.8% (FY25A) to 27.7% (FY27F).
• The company maintains a robust free cash flow to equity, forecasted at S\$3,245m (FY26F) and S\$4,413m (FY27F).
• Return on Equity (ROE) is set to rise from 10.3% (FY26F) to 11.2% (FY27F).

SingTel’s Segment Operating Metrics

• Singapore total mobile subscribers: 4.5m (FY25A, FY26F), expected to grow to 4.6m in FY27F
• Optus total mobile subscribers: 10.7m (FY25A), rising to 11.0m (FY26F) and 11.2m (FY27F)
• Singapore blended mobile ARPU: S\$24.8 (FY25A), S\$24.7 (FY26F), S\$24.8 (FY27F)
• Optus blended mobile ARPU: A\$32.0 (FY25A), A\$32.4 (FY26F), A\$32.5 (FY27F)

Competitive and Regulatory Developments

• The Simba-M1 merger, announced on August 11, is seen as earnings-neutral for FY26, but could increase competitive risk in Singapore’s mobile market.
• SingTel’s strategy to pare down its Bharti Airtel stake could unlock further value, with the Mittal family’s planned share sale potentially serving as a catalyst.
• Risks include currency volatility (S\$ appreciation impacts regional earnings), heightened competition, and regulatory changes in core markets.

Shareholder Snapshot and Price Performance

• Major shareholders: Temasek Holdings (52%), Capital Group (3.4%), Blackrock (1.8%)
• Free float: 48%
• Current share price: S\$3.92 (as of report date), with a target price of S\$4.10 (+4.6% upside)
• 12-month absolute performance: +38.0%

ASEAN Telco Sector: Company-by-Company Analysis

Telekom Malaysia (T MK)

• Rating: Add
• Target price: 8.70 MYR
• CY26F P/E: 12.5x, Dividend yield: 4.8%
• Strong recurring ROE of 18.9%, EV/EBITDA of 5.2x

Axiata Group (AXIATA MK)

• Rating: Add
• Target price: 3.40 MYR
• CY26F P/E: 27.5x, Dividend yield: 4.0%
• Relatively low ROE at 4.0%, EV/EBITDA at 3.8x

CelcomDigi Bhd (CDB MK)

• Rating: Hold
• Target price: 4.00 MYR
• CY26F P/E: 19.8x, Dividend yield: 4.9%
• Solid recurring ROE of 13.6%, EV/EBITDA of 8.8x

Maxis Berhad (MAXIS MK)

• Rating: Hold
• Target price: 3.93 MYR
• CY26F P/E: 17.6x, Dividend yield: 5.6%
• Strong ROE at 25.0%, EV/EBITDA of 8.2x

SingTel (ST SP)

• Rating: Hold
• Target price: S\$4.10
• CY26F P/E: 21.4x, Dividend yield: 5.0%
• ROE at 10.9%, EV/EBITDA at 13.2x

Starhub (STH SP)

• Rating: Hold
• Target price: S\$1.30
• CY26F P/E: 12.1x, Dividend yield: 6.6%
• High recurring ROE of 25.8%, EV/EBITDA at 6.2x

PT Telkom (TLKM IJ)

• Rating: Add
• Target price: IDR 3,400
• CY26F P/E: 12.5x, Dividend yield: 6.4%
• Recurring ROE at 16.9%, EV/EBITDA at 4.9x

Indosat (ISAT IJ)

• Rating: Add
• Target price: IDR 2,340
• CY26F P/E: 12.2x, Dividend yield: 4.6%
• ROE at 16.6%, EV/EBITDA at 4.3x

XLSmart (EXCL IJ)

• Rating: Add
• Target price: IDR 2,550
• CY26F P/E: 27.6x, Dividend yield: 2.2%
• ROE at 4.0%, EV/EBITDA at 4.8x

Advanced Info Services (ADVANC TB)

• Rating: Hold
• Target price: THB 301.00
• CY26F P/E: 21.2x, Dividend yield: 4.2%
• Very high ROE at 40.3%, EV/EBITDA at 8.5x

True Corp (TRUE TB)

• Rating: Add
• Target price: THB 14.10
• CY26F P/E: 17.0x, Dividend yield: 2.9%
• ROE at 25.6%, EV/EBITDA at 6.1x

Conclusion: Steady Outlook With Risks and Opportunities

SingTel’s 1Q26 results reinforce its position as a stable, dividend-yielding regional telco leader. While valuation caps near-term upside, ongoing asset monetization and potential operational gains in key markets could serve as catalysts. Investors should monitor currency volatility, competitive pressures—especially in Singapore—and regulatory shifts. SingTel’s performance, along with the ASEAN telco sector’s valuation and yield landscape, presents a mix of opportunities and risks for investors seeking exposure to Asia-Pacific telecommunications.

About the Analyst

Analyst: Prem Jearajasingam CGS International Securities

Stock Ratings and Definitions

• Add: Total return expected to exceed 10% over the next 12 months
• Hold: Total return expected between 0% and +10%
• Reduce: Total return expected to fall below 0%