Singtel’s Strategic Divestment and Strong Regional Presence Drive Buy Rating

Analyst Sachin Mittal of DBS maintained a Buy rating on Singtel (SNGNF – Research Report), retaining the price target of S$3.93.

Sachin Mittal has given his Buy rating due to a combination of factors influencing Singtel’s financial outlook. The company is expected to receive significant proceeds from its strategic divestment of a 49% stake in the Comcentre property, aligning with its broader divestment goals. This move not only strengthens Singtel’s financial position but also provides capital for reinvestment into its core operations, which are closely tied to stock performance.
Singtel’s strong geographical presence, being a leading telecom operator in Singapore and holding substantial stakes in telecom entities across India, Indonesia, the Philippines, and Thailand, contributes significantly to its operating profit. Additionally, the potential narrowing of the holding company discount from 34% to 10-15% and the anticipated growth in core operating profit further bolster its investment appeal. These factors, combined with a projected earnings CAGR of 9% and a yield of 4.8% over the next few years, underpin Mittal’s positive outlook on Singtel’s stock.