SG Telecom Sector

SG Telecom Sector: CS initiates sector outlook for 2011. Expect more active capital management, notin that NGNBN (New Generation National Broadband Network) is a 2012 story for the telecoms sector in light of the delays in the roll-out of OpenNet’s all-fibre network and the start-up issues faced by the NGNBN operating companies and retail service providers….

Tip capital management will be a key catalyst for the sector. Prefer M1 (Maintain Overweight , $2.66 TP) followed by Singtel (maintain Overweight $3.75 TP). Cite M1 as the largest potential beneficiary of the new opportunities arising from the introduction of NGNBN over the nx few years….

Trading at 12x FY11E earnings and 11x FY12E earnings, SingTel’s valuations are undemanding. Maintain Underperform for StarHub with $2.29 TP, on back of more demanding valuations and intense competitive landscape.