Singtel’s Key Mobile Markets Showing Some Positive Signs; FVE Raised to SGD 2.80

We increase our fair value estimate for narrow-moat Singtel to SGD 2.80 from SGD 2.70 previously, following the release of a broadly in-line first-quarter fiscal 2023 result (quarter ending June 2022). The increase was mainly due to currency and associate share price updates. Fiscal first-quarter operating revenue and EBITDA declined by 5.6% and 2.0%, respectively. In constant currency terms, excluding NBN migration revenue and contributions from Amobee, fiscal first-quarter revenue increased 4.1%, with EBITDA up 5.4%. We retain our narrow moat rating for the company. Our fair value implies a price/earnings ratio for Singtel of 22 times, which is slightly ahead of its average over the past 10 years. On our valuation, the associate businesses are worth around 75% of the total value of Singtel, with the remainder from Singtel’s consolidated Singapore and Australian businesses.