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SingTel
Bloomberg: ST SP
Reuters: STEL.SI
21 Dec 2011
Price Relative
S$ 4 .4 3 .9 3 .4 2 .9 2 .4 1 .9 D e c -0 7 J a n -0 9 J a n -1 0 J a n -1 1 R e la t iv e In d e x 216 196 176 156 136 116 96 76
S in g Te l ( L H S )
R e la t iv e S T I IN D E X ( R H S )
Revenue EBITDA Pre-tax Profit Net Profit Net Pft (Pre Ex.) EPS (S cts) EPS Pre Ex. (S cts) EPS Gth (%) EPS Gth Pre Ex (%) Diluted EPS (S cts) Net DPS (S cts) BV Per Share (S cts) PE (X) PE Pre Ex. (X) P/Cash Flow (X) EV/EBITDA (X) Net Div Yield (%) P/Book Value (X) Net Debt/Equity (X) ROAE (%)
16,871 7,275 5,043 3,907 3,907 24.6 24.6 13 13 24.6 14.3 140.8 12.4 12.4 10.8 7.4 4.7 2.2 0.2 18.2
18,139 7,290 5,021 3,822 3,822 24.1 24.1 (2) (2) 24.1 24.9 150.6 12.7 12.7 11.6 7.4 8.2 2.0 0.2 16.5
18,617 7,331 4,977 3,780 3,780 23.8 23.8 (1) (1) 23.8 16.7 149.5 12.8 12.8 11.7 7.5 5.5 2.0 0.3 15.9
19,236 7,585 5,255 4,000 4,000 25.2 25.2 6 6 25.2 17.6 158.1 12.1 12.1 11.7 7.2 5.8 1.9 0.2 16.4
Second stage pricing. Upon the LTE roll-out reaching 80% of users by end-2012, 50GB 3G data cap will shrink for new subscribers of the plan and for existing subscribers on contract expiry. Third stage pricing. When LTE roll out reaches 95% by 1Q 2013, 3G data cap may be dropped altogether, leaving new subscribers with 10 GB of LTE data. Our view Telcos are rectifying their mistake of offering too generous data caps in the past. Telco are offering users with incentives of higher speeds and better quality of service (priority pass from SingTel) to encourage more data usage at higher price. SingTel revealed that 11% of users account for 60% of data traffic and there is a need to charge these users for using the network. All three players are limiting data-caps gradually. StarHub has one 3G plan with 30GB cap, while other plans are unlimited plans. M1, however, has plans with 5GB, 12 GB and 50 GB caps. M1 launched 4G in June 2011 for business use only while StarHub will launch LTE in 2H12. We prefer SingTel and StarHub to M1 as National Broadband Network is progressing slower than expected. While the weakening of Indian Rupee in the last six months (~15%) may impact SingTels earnings adversely by 3-4%, regional associates in India and Indonesia are in good shape.
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