RHB Group Research continues to rate Singapore Telecommunications (Singtel) “buy” with an unchanged target price of $3.00.

In a Sept 7 report, the RHB research team says, “We expect Singtel to subscribe to its portion of Airtel’s right shares with a manageable uptick in net debt/EBITDA. The recent disposal of towers by Telkomsel is value accretive. Overall, the green shoots of recovery in the group’s mobile business remain the key investment thesis with core earnings set to rebound in FY2022 after four years of decline.”

Singtel’s Indian associate Airtel has recently announced plans to raise up to INR 210 billion ($3.9 billion) via a 1-for-14 rights issue priced at INR 535. Similar to its 2019 cash call which raised US$3.6 billion ($4.8 billion), the promoters (Bharti Telecom and Singtel) who hold a combined 55.8% stake, will collectively subscribe to their entitlements.

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