CGS-CIMB Research is keeping its “add” recommendation on local telco giant Singapore Telecommunications (Singtel) with a target price of $2.90. Analysts Foong Choong Chen and Sherman Lam believe that Singtel’s upcoming 3QFY2022 may see a rise in net profit, led by higher earnings from associated and the Singapore consumer segment.
The analysts estimate a 26-28% y-o-y increase in core net profit to $540-550 million for the third quarter, which results are expected to be announced on Feb 15. Furthermore, the core net profit for this period will also include an approximately $400 million net gain from the sale of its 70% stake in Australia Tower Network, which transaction was completed in November 2021.
“We think 3QFY2022 Singapore consumer EBIT jumped 28-35% y-o-y (up 20-27% q-o-q), despite lower Job Support Scheme (JSS) credits, driven by increased uptake of higher average revenue per user (ARPU) 5G plans, some recovery in roaming and higher device sales,” says Foong and Low in a Feb 9 report.