UOBKayhian on 5 June 2014
FY15F PE (x): 16.1
FY16F PE (x): 14.9
Consumer Singapore: Maintains leadership in mobile. About 50% of post-paid
subscriber base has migrated to tiered data plans and 4G, of which 16% has exceeded
their data bundle. 4G is more efficient for transporting data and provides substantial
reduction in costs/GB. SingTel is also looking at Heterogeneous Network (HetNet)
whereby its mobile network is integrated with a WiFi network and both networks share
the same backhaul network.
SingTel has strengthened its leadership position in mobile in Singapore and could
make further inroads into homes through mioTV. The situation in Australia remains
dicey but Optus aims to preserve its market share. We roll forward our valuation to
FY15. Our target price is S$4.10, based on DCF (required rate of return: 6.2%, terminal
growth: 1.0%).
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