Singtel drop around $0.08 (around 3%) today. The recent downside of Singtel is mainly due to concern on weakness of Australia unit, Optus which will affects Singtel earning growth. Telstra, which is one of the main competitor of Optus has issued a profit warning. Telstra mentioned that the full year profit will be down by around 7-10%. As Optus generate around 24% to the group earning in Q1. Any profit decrease in the Australia unit will affect Singtel earning growth. Furthermore, with the recent weakness in Rupiah, the contribution by Telkomsel in Indonesia will affect Singtel earning as well. The Indonesia unit contribute around 20% in Q1. In addition, Singtel is also facing challenges in Singapore market as it has been losing market share in Singapore market.
Comment: I had sold all my Singtel shares before the dividend payout. Can consider to buy back on this recent weakness. The only concern is whether Temasek would do a sale of Singtel share since Temasek had recently bought some stack in Bank of China. Based on the today closing price, the dividend yield will be around 5% if Singtel give around the same dividend of $0.13 per share. My Target Price: $2.45
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1 comment:
Temasek issueing bonds so got cash, maybe they would not sell Singtel yet. There is still upside for Singtel.
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