Broker: Maybank Research Pte Ltd
Date of Report: 5 September 2025
Singapore Market Insights: Telco Consolidation, AI Ambitions, and Key Corporate Developments

Singapore Telcos: Consolidation Sets Stage for Growth

The Singapore telecommunications sector is poised for a transformative upswing as consolidation injects renewed rationality into the market. Maybank Research has upgraded its sector view to POSITIVE, forecasting a reversal from past declines to mobile revenue growth of 4–5% per annum in 2026–2027, compared to annual declines of -3% to -5% seen previously.
Global trends suggest that Average Revenue Per User (ARPU) typically recovers when pricing discipline returns following industry consolidation. In Singapore, ARPUs have fallen by 36–41% since 2017 and now sit 15–40% below developed market Asia peers. This positions Singapore telcos for meaningful upside as the sector recalibrates.
Key highlights:

• StarHub upgraded to BUY, with a target price (TP) of SGD1.35, offering a robust 6% yield and trading at a -1σ valuation.
• Singtel target price raised by 11% to SGD4.75.
• Integration risks remain for the merged entity, but established incumbents are expected to re-rate higher.

ISOTeam: Project Delays Impact FY25, But Stronger Outlook Ahead

ISOTeam faced setbacks in FY25, reporting revenue of SGD119.2 million and PATMI (Profit After Tax and Minority Interests) of SGD5.1 million, both below expectations due to project start delays and deferred recognition on certain contracts. However, prospects remain bright for 1HFY26E, where management anticipates significant improvement as delayed projects are recognized and the pace of project awards accelerates.
Additional highlights:

• Drone-testing on BTO (Build-To-Order) sites is scheduled by end-October 2025, potentially enhancing operational efficiency.
• Management expects a pick-up in project awards in the coming months.
• The BUY rating is maintained, though the target price is lowered to SGD0.100 from SGD0.104, pegged to a 9x blended FY25/26E P/E.

ST Engineering: Leading Singapore’s AI Revolution

ST Engineering (STE) has unveiled an ambitious SGD250 million artificial intelligence programme designed to push the boundaries of human-machine collaboration. The flagship project, Manned-Unmanned Teaming Operating System (MUMTOS), is a cyber-secured AI command and control platform that integrates physical AI with sensors, communications infrastructure, and unmanned assets at scale.
Key targets and initiatives:

• Programme aims to move robotics, swarm, and humanoid solutions from concept to application.
• Initial focus is on enhancing teamwork between humans and unmanned systems.
• Goal to build a talent pool of 5,000 AI engineers, with 1,000 specializing in AI module development, cybersecurity for AI, and agentic AI systems.
• STE will fund and lead the programme in partnership with academic and research institutions.

Straits Times Index Review: Changes in the Reserve List

Following the quarterly review in September, the Straits Times Index (STI) “reserve” list has seen notable changes:

• Olam Group and Yangzijiang Financial Holding have replaced CapitaLand Ascott Trust and ComfortDelGro on the reserve list.
• The STI’s main constituents remain unchanged.
• The updated reserve list now includes: Keppel REIT, NetLink NBN Trust, Olam Group, Suntec REIT, and Yangzijiang Financial Holding.
• Changes will take effect from 22 September, with the next review scheduled for December 2025.

Corporate Developments: Oiltek, Aztech Global, and Kingsmen Creatives

Oiltek International

Oiltek International reassured investors that its ongoing projects in Indonesia are unaffected by the current unrest, as they are located away from major city centres where demonstrations are occurring.

Aztech Global

Aztech Global was awarded as a winner in Singapore’s Best Managed Companies 2025 awards, presented by Deloitte Private. This marks Aztech’s second consecutive win, highlighting its strong operating model and commitment to delivering AI-powered IoT manufacturing solutions across diverse market segments.

Kingsmen Creatives

Kingsmen Creatives has increased its investment in K-Fix Production, a furniture manufacturer, wholesaler, and trader, via a RM3.5 million capital injection through its wholly-owned subsidiary, Kingsmen Projects. The funding is intended to boost K-Fix’s working capital and is sourced internally, with no material impact expected on group EPS or NTA for FY25.

Disclosure and Analyst Certification

Maybank Research and its analysts have declared that, as of 5 September 2025, they hold no interests in the companies covered in this report in Singapore, Hong Kong, or India. In Malaysia and Thailand, there may be positions or interests in the securities referred to, and investors are advised to exercise discretion and perform their own due diligence.

Investment Rating Definitions

Conclusion: Singapore’s Markets on the Cusp of Change

The Singapore market is entering a period of potential growth and innovation, spurred by telco consolidation, AI-led transformation by ST Engineering, and continued resilience and strategic moves by corporates such as ISOTeam, Aztech Global, and Kingsmen Creatives. Investors should remain vigilant, monitor integration and execution risks, and seek professional advice tailored to their financial circumstances.
Maybank Research continues to provide detailed coverage, with ratings and targets reflecting both upside potential and underlying sector dynamics as Singapore’s key sectors reposition for future growth.