Overview of SingTel’s Integrated Performance
The latest report on SingTel provides an in‐depth review of the company’s robust performance during the third quarter of FY25 and detailed forward-looking guidance. SingTel’s 3QFY25 core net profit posted at S\$680 million—up 16% quarter-on-quarter and 22% year-on-year—signalling a sustained momentum in core earnings. The group’s nine-month performance has reached approximately 75% to 74% of full-year consensus estimates as the EBIT growth climbed strongly by 20% yoy. With a forecast of “high teens to low twenties” for FY25 EBIT growth and a forward dividend per share (DPS) guidance of roughly 16.5 cents, SingTel remains well positioned to deliver both capital appreciation and attractive yields, with an expected yield near 5% for FY25 and even higher for FY26/27.
Deep Dive into Operational Segments
Group-Level Performance
At the group level, SingTel has reaped strong results: core EPS growth in 3QFY25 aligned with estimates and robust 9M EBIT performance has led to an upward revision of FY25 EBIT guidance. The company’s strategic execution in cost cutting, asset rationalisation, and margin expansion has played a key role in preserving an overall solid financial footing. The management’s determination to unlock value through monetisation initiatives is evident from the proactive divestments and steady commitment to streamlining operations.
Singapore Division: SingTel Singapore, NCS and Digital InfraCo
The Singapore business experienced mixed trends. SingTel Singapore and NCS have recorded margin expansions—Singtel Singapore with an improvement of around 110 basis points and NCS by about 65 basis points—thanks to robust cost-cutting measures and enhanced focus on higher-margin projects. However, the Digital InfraCo business saw a marked decline in EBIT margin due to significant expansion costs related to new initiatives such as the Paragon Platform and AI cloud services. Revenue in the Singapore segment slumped by 1% year-on-year, driven by intense competition in the mobile market, lower handset sales, and weak demand in legacy services, although fixed broadband revenue provided partial offset.
Optus Division: Strong Margin Growth and Efficiency Gains
Optus, SingTel’s Australia-based subsidiary, demonstrated notable resilience amid a competitive landscape. The division’s EBIT margin enhanced by approximately 135 basis points year-on-year, primarily as a result of effective cost optimisation, a reduction in depreciation charges through fixed asset rationalisation, and a positive pricing adjustment in the postpaid mobile segment. Despite the commencement of the 900 MHz spectrum service and a challenging exchange rate environment, Optus’ overall revenue remained stable and mobile subscriber growth was sustained, backed by incremental improvements in both prepaid and postpaid ARPU.
Associates: Monetisation and Strategic Divestments
SingTel’s associate portfolio has contributed significantly, with key players like Bharti Airtel and Advanced Info Service (AIS) leading the charge. Bharti Airtel recorded an impressive increase of 26% quarter-on-quarter and nearly 99% year-on-year, whereas AIS witnessed solid performance improvements of 11% and 35% in the respective periods. Other associate entities such as Telkomsel, Globe Telecom, and Intouch displayed mixed results, with Intouch notably affected by ongoing divestment activities. During the quarter, SingTel divested approximately 3.54% of its Intouch stake for a net consideration of S\$444 million—a move viewed as evidence of the group’s commitment to executing its S\$6 billion medium-term asset monetisation pipeline. Moreover, there is an expectation that SingTel might further adjust its Bharti Airtel stake in order to realign ownership structures.
Valuation and Target Price Breakdown
The valuation model for SingTel employs a comprehensive sum-of-parts approach. The breakdown includes:
- Singapore DCF contribution
- Optus DCF contribution
- Nxera KKR deal valuation
- NCS valuation based on a 10x CY25F EV/EBITDA multiple
- Core business DCF and multiple approaches
- Advanced Info Services valuation with a target price guided at THB291
- Bharti Airtel market value estimation based on current market pricing
- Globe Telecom market value, Intouch market value and further adjustments for NetLink and Singapore Post
- Telkomsel DCF valuation
- Aggregate associates’ valuation and adjustments for net debt
After applying a HoldCo discount of 25%, the equity value post discount stands at S\$62,097 million, translating to a target price of S\$3.75 per share. With the current share price at S\$3.33, this provides an attractive upside potential of approximately 12.6%.
Financial Forecasts and Core EPS Adjustments
The forecasts for FY25 to FY27 have been fine-tuned with a slight upward revision in EBIT expectations by about 2%, largely driven by lower depreciation and amortisation expenses. Additionally, there is a small downward adjustment in associate profit forecasts for FY26-27 by 0.4-0.6% to account for higher losses at Bharti Telecom and reduced contributions from the Intouch stake. The core EPS is projected to grow at a CAGR of 12% from FY24 to FY27, underlining the strong earnings momentum expected across the business.
Peer Analysis and Regional Telco Landscape
Indonesian Telcos
In Indonesia, key telcos such as Indosat and Telkomsel demonstrate compelling growth opportunities with attractive dividend yields and earnings potential. XL Axiata also stands as a significant player; the regional forecasts and market multiples suggest stable performance albeit with some competitive pressures.
Malaysian Telcos
Malaysian industry giants including Axiata Group, CelcomDigi, Maxis Berhad, and Telekom Malaysia are evaluated for their valuation metrics, dividend yield, and growth rates. The competitive landscape here is characterised by moderately attractive dividend yields and rising earnings growth, with peer multiples serving as key reference points for valuation.
Philippine Telcos
Within the Philippines, Globe Telecom Inc. and PLDT Inc. are presented as robust contenders. Globe Telecom’s valuation and market outlook, in particular, receive positive coverage, whereas PLDT’s lower valuation multiples and higher dividend yields highlight the sector’s mixed dynamics.
Singapore and Thai Telcos
For Singapore, alongside SingTel, Starhub has been analysed for its market performance, capital efficiency, and dividend trends. In Thailand, Advanced Info Service immensely benefits from its robust market position, while True Corporation’s performance is under close watch given its relatively lower valuation metrics.
ESG and Sustainability Leadership
SingTel has emerged as a top ASEAN telco for sustainability, earning high marks for its robust cybersecurity measures, industry-leading staff development initiatives, and a pioneering roadmap towards net zero emissions by 2045. In addition to substantial improvements in carbon emissions—which have fallen by 11% year-on-year and are 20% lower compared to FY3/15—SingTel’s strong ESG metrics further enhance its appeal to socially responsible investors. This leadership in ESG is not only expected to attract ESG-focused capital but also positions SingTel favorably against competitors in a rapidly evolving regulatory landscape.
Investment Recommendation and Rating Framework
The report reiterates an “Add” recommendation on SingTel, buoyed by its strong operational momentum, attractive dividend policy, and robust asset monetisation initiatives. Key re-rating catalysts include strong EBIT growth, the potential for sizable share buybacks, and ongoing strategic divestments designed to unlock value. Downside risk factors remain in the form of possible large asset impairments, intensified mobile competition, and recurring forex headwinds.
The stock rating distribution reflects a healthy investor sentiment with approximately 67.4% of the ratings at “Add,” 22.2% at “Hold,” and only 10.4% at “Reduce.” The recommendation framework further defines “Add” as an expectation of a total return exceeding 10% over the next 12 months, combining target price appreciation and forward dividend yields.
Conclusion
This comprehensive analysis underscores SingTel’s strong performance across its diverse operating segments, its forward guidance underpinned by solid EBIT growth and earnings momentum, and the attractive valuation derived from its diversified business model and sum‐of‐parts methodology. With a clear commitment to sustainability and strategic asset monetisation, SingTel is well positioned to deliver considerable upside for investors against a backdrop of competitive regional dynamics and evolving market conditions.
The detailed peer comparisons, robust financial forecasts, and precise valuation adjustments provide a clear picture of both SingTel’s current standing and its future potential, making it a compelling addition to any diversified telecommunication portfolio.
