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DBS Vickers - Singapore business shines again
Buy S$3.92 Price Target : 12-month S$ 4.50 (Prev S$ 4.15)
Story: Underlying net profit of S$914m (up 12% yoy, 5% qoq) is slightly above our (S$910m) and consensus expectations (S$906m). We have excluded S$84m in compensation from IDA from last year results for fair comparison.
Management announced an interim dividend of 5.6 cents up 52% yoy.
Point: Singapore business outperformed again and more than compensated for slight disappointment from Australia. Overall, we continue to expect combined earnings from Singapore and Australia to improve marginally while earnings from regional associates to improve significantly in the next 2-3 years.
Relevance: Dividend yield for FY08 could be better than our current expectations of 3.1%. We maintain BUY with 1-year revised target price of S$4.50 based on SOTP. Higher target price for Bharti, Telkomsel and Globe has added 20 cents, 12 cents and 3 cents respectively to our previous target price of S$4.15.
OCBC - Singapore Telecom: Associates no longer shining
Singapore Telecommunications Ltd (SingTel) reported a mixed set of 2Q08 results. Revenue came in at S$3.7bn, +3.6% QoQ, with PATMI at S$988m +6.5% QoQ. The key driver to earnings growth was due to a divestment gains worth about S$74.5m as well as lower tax at its associates and at the group level. SingTel?s all important associates did poorly with pre-tax contribution falling by 10% QoQ to S$633m. Even though Bharti did well, all others appeared to have suffered from higher costs, forex depreciation, lower revenue or a combination of everything. Nevertheless the underlying profit of S$913m is in line with our estimate. SingTel will hold an analyst briefing later this morning. In the meantime, we will keep our fair value of S$3.32 and our HOLD rating.
Singtel 2Q & HY results ? Group revenue grew an impressive 11 per cent to S$3.70 billion, the second consecutive quarter of double-digit growth. In Singapore, the focus on winning share in growth segments and maintaining leadership position in key segments helped to achieve double-digit revenue growth for the second consecutive quarter. Optus delivered a resilient performance against a highly competitive market. In Australian Dollar terms, Optus recorded a 3.7 per cent revenue growth while in Singapore Dollar terms, the growth was 12 per cent as the Australian Dollar strengthened by 8 per cent from a year ago. The regional mobile associates continued to record strong profit growth. Excluding exceptional items, the associates? pre-tax earnings were up 24 per cent to S$633 million, driven mainly by Bharti. Net profit increased to S$988 million. Underlying net profit 2 grew 12 per cent to S$914 million and the corresponding earnings per share was up a higher 17 per cent to 5.74 cents. SingTel announced interim ordinary dividend amounting to S$891 million or 5.60 cents per share. This represents an increase of 52 per cent from 3.69 cents per share a year earlier. This interim payout represents 50 per cent of the Group?s underlying net profit for the half year ended 30 September 2007.
SingTel also announced that the aggregate number of mobile subscribers in the region, including its associates, has reached 157.97 million as at 30 September 2007. On a year-on-year basis, its mobile subscriber base in the eight markets ? Australia, Bangladesh, India, Indonesia, Pakistan, the Philippines, Singapore and Thailand ? grew strongly by 57 per cent from about 100.77 million customers. Warid Telecom, its latest investment in Pakistan, contributed 11.87 million subscribers.
SingTel keeps outlook as profit meets forecast
SingTel, Southeast Asia's largest phone firm, reported a 3.3 percent rise in quarterly profit, broadly in line with expectations, and kept its full-year forecast as its key emerging markets businesses continued to grow.
However, its Optus unit, Australia's second-largest mobile operator, reported a 5.6 percent decline in underlying net profit to A$123 million ($114 million) despite a 3.7 percent increase in operating revenue to A$1.93 billion.
Singapore Telecommunications
Singtel raised its sales growth guidance in August to more than 5 percent as strong economic growth in Singapore boosted demand from corporate customers. Singapore had been viewed as a low-growth market.
State-controlled SingTel
SingTel posted underlying net profit, before goodwill and exceptionals, of S$914 million in the quarter, versus S$815 million a year ago.
Operating revenue in the quarter climbed 11 percent to S$3.7 billion, while operational EBITDA rose 3 percent to S$1.12 billion.
SingTel shares rose 18 percent in the July-Sept quarter, and have gained a third in value so far this year, just above a 30 percent rise in the benchmark Straits Times Index <.STI>.
Facing a home market of just 4.7 million people, where mobile penetration has reached 100 percent, SingTel has spent S$18 billion in recent years buying stakes in operators in high-growth Asian nations, and in the bigger Australian market.
SingTel now derives about 75 percent of revenues and two-thirds of pre-tax earnings from operations outside Singapore.
It owns Australia's No 2 mobile operator Optus and major stakes in six emerging market operators, including India's Bharti Airtel
Most of these investments have shown phenomenal growth in wireless subscribers in recent years. Bharti, India's top mobile services firm, last week beat forecasts with a 73 percent rise in quarterly profit, as its user base surged in the world's fastest growing mobile market.
Optus has been grappling with ebbing subscriber growth and regulatory changes in a saturated domestic market.
But Optus Mobile which holds a third of the Australian market, is SingTel's single-biggest revenue generator. It competes with Telstra Corp
SingTel, Southeast Asia's largest phone firm, reported a 3.3 percent rise in quarterly profit, broadly in line with expectations, and kept its full-year forecast as its key emerging markets businesses continued to grow.
However, its Optus unit, Australia's second-largest mobile operator, reported a 5.6 percent decline in underlying net profit to A$123 million ($114 million) despite a 3.7 percent increase in operating revenue to A$1.93 billion.
Singapore Telecommunications
Singtel raised its sales growth guidance in August to more than 5 percent as strong economic growth in Singapore boosted demand from corporate customers. Singapore had been viewed as a low-growth market.
State-controlled SingTel
SingTel posted underlying net profit, before goodwill and exceptionals, of S$914 million in the quarter, versus S$815 million a year ago.
Operating revenue in the quarter climbed 11 percent to S$3.7 billion, while operational EBITDA rose 3 percent to S$1.12 billion.
SingTel shares rose 18 percent in the July-Sept quarter, and have gained a third in value so far this year, just above a 30 percent rise in the benchmark Straits Times Index <.STI>.
Facing a home market of just 4.7 million people, where mobile penetration has reached 100 percent, SingTel has spent S$18 billion in recent years buying stakes in operators in high-growth Asian nations, and in the bigger Australian market.
SingTel now derives about 75 percent of revenues and two-thirds of pre-tax earnings from operations outside Singapore.
It owns Australia's No 2 mobile operator Optus and major stakes in six emerging market operators, including India's Bharti Airtel
Most of these investments have shown phenomenal growth in wireless subscribers in recent years. Bharti, India's top mobile services firm, last week beat forecasts with a 73 percent rise in quarterly profit, as its user base surged in the world's fastest growing mobile market.
Optus has been grappling with ebbing subscriber growth and regulatory changes in a saturated domestic market.
But Optus Mobile which holds a third of the Australian market, is SingTel's single-biggest revenue generator. It competes with Telstra Corp
Candlesticks show bullish engulfing pattern.
Results should be good.
Vested.
Hi Guys, i am still learning about stocks and shares.
Ermm may i know what normally happens when a company released their Quaterly results? will the shareholders expect more dividends at the end of the year if there is a profit? Thus this may result in more ppl trade in this share right? as they wan the dividends from the company.
Then do you how to check when are the dividends released for each company?
Thanks alot guys
Hi
2Q results on 7th November, not 3Q
Anyone knows when is Singtel 3Q financial reporting out ? Is it Nov 7? Thanks
Yes, lately this has become the shadow of STI. Look at it today, if STI were to touch 3650, it will follow suit at $3.80. Time to buy in more?
Minesweeper, in this case, no news is good news! SingTel will be testing new high when STI is testing 4000 soon..... see the link? Cheers!
That depends on what you purchase it with.
Is the discounted singtel shares under special discounted shares scheme considered as CPF share investment scheme or Cash ?
Guys,
I believe 7-Nov is the date of results announcement...Any idea how the results are going to be ? Hope for good as usual..... I see no discussion on ths counter these days... what happened ? why everyone so quite.....
Yes ten4one.....I shared the same thinking yesterday. that's why I just bought 5k for testing towards market close at $3.82. Will let it go once it hit $4.00. At current market sentiment, it's better to be long than short especially for this counter.
Farmer, at the time of posting it means BUY since the selling is just Market's reaction to perceived repeat of 'Black Monday' syndrome. There is no fundamental reason to sell and I was thinking of short-term to mid-term trade. You have to be very good to know how to short the Market and not everyone have the discipline and knowledge to short - I don't advise 'shorting' unless you're very savvy! Cheers!
I think there is a significant probability that Singtel will trade at $3.80 and below in the next few days, the selldown has not been completed yet especially in DJIA and STI.
MACD is currently trending down for both indices, plus today, Singtel has actually touched $3.80 today before hovering in range around $3.84 - $3.86.
Let's see what happens tomorrow. Do note DJIA futures still at -66 in the red with the European markets running now, so chances are we might see Singtel whiplash around $3.76-$3.84 tomorrow.
We may not see much stability yet till closer to the end of this month, so expect similar volatility in Singtel's prices till then.
If CWQuah's checkout is correct, I think $3.86 is a hard resistant to crack for today.
I dun get what ten4tone's message on opportunity...is it to buy or sell short?
I will wait patiently for a fairer value at $3.50 - 3.60 before buy-in more.
Having a CFO as CEO is not too bad as they tends to be sensitive with bottomline so profitability is ensured. In my opinion, fair price of SingTel is $3.3 or less, StarHub $2.8 or less & M1 $2 or less
Be an early Bird and sieze the opportunity! Don't miss out this time! Cheers!
Check out the 4000lot sel block at 3.86. So be patient, wait for lower prices.