CLSA notes that Singtel has fallen 5% ytd due to weakness in its associates. While its Thai and Pinoy associates do face significant threat, they make up only 10% of Singtel’s valuations and are trading below the 5 yr average EV/EBITDA. AIS, its Thai associate and Globe, its Pinoy associate, are seeing significant competition issues with AIS’s loss of spectrum to a rival while a new entrant into the Phillippine market could potentially crimp growth at Globe.
Despite this, the research house remains confident of Singtel’s other subsidiaries in Indonesia (TelKomsel) and India (Bharti Airtel) as they are poised to monetise growth in mobile data.
With its dividend yield well-supported, Singtel does offer good value in the current volatile market. the house upgrades singtel to a high conviction Buy with TP of $4.21.
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