'Buy' Singtel now and get its core business for free

Maybank Kim Eng is keeping its “buy” recommendation on Singtel with a target price of $2.88.

In a Jan 18 report, lead analyst Kareen Chan says, “The stock has rebounded 25% from its decade low but we see further upside as recovery is underway, driven by upswing from Bharti in FY2022. We see deep value in the stock and it is backed by 5.1% yield.”

According to Chan, Singtel’s recovery will be underpinned by associates. Currently, the Indian telco sector is undergoing a structural shift, and it’s benefitting from a surge in data usage. With that, Bharti has outpaced its peers across all operating metrics. It is gaining market share from 2G to 4G conversion as 4G subscriber additions at 14.4 million q-o-q was higher than Reliance Jio’s of 7.3 million in 2QFY2020.

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