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Missed expectations but Singtel is still a 'buy' for RHB

PC Lee
PC Lee8/10/2018 01:05 PM GMT+08  • 3 min read
Missed expectations but Singtel is still a 'buy' for RHB
SINGAPORE (Aug 10): Singtel’s 1Q19 core earnings may have missed expectations on protracted weakness of its associates and enterprise margin dilution, but the group remains RHB Research’s preferred exposure to Singapore telcos, given its diversified e
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SINGAPORE (Aug 10): Singtel’s 1Q19 core earnings may have missed expectations on protracted weakness of its associates and enterprise margin dilution, but the group remains RHB Research’s preferred exposure to Singapore telcos, given its diversified exposure and sustainable dividends.

RHB says management has maintained its prior guidance although it has trimmed its FY19-21 forecast core earnings by 7-9% after the results call to reflect weaker associate contributions for Airtel and Telkomsel, and lower margin assumptions for the enterprise business.

“Maintain ‘buy’, SOP-based target price adjusted to $3.70 from $3.90,” says RHB’s Singapore research team in a Thursday report. As at 10.56am, shares in Singtel are trading at $3.15, valuing the stock at about 12 times FY20 forecast EV/EBIDA, or at a discount to its historical mean of 13.5 times, backed by prospective dividend yields of over 5%.

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