SGT 0.00% $3.98 singapore telecommunications limited.

Singtel - where is the bottom???, page-4

  1. 4,941 Posts.
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    Hi Munch,

    Still need to digest Deutsche Singapore's detailed report on SGT, from last week (27 May).

    Performance wise, they have rated the stock as "underperform" with a S$1.38 price target. That makes for a ~A$1.35 local price range.

    In brief, Deutsche is concerned with the following:
    1)
    slowing revenue growth at Optus;
    2)
    higher cost base following the restatement of previously capitalised expenses.

    Deutsche considers that:
    1)
    SGT's competitive lead remains intact, as StarHub and
    SCV have been focused on their forthcoming merger. In Singapore;
    2)
    more strident cost controls resulted in EBITDA margin improvement for the Singapore business of 80bp, up to 51.8%; and
    3)
    data services growth levelled out (up 11% YOY in 2H02, vs. 24% in 1H02, but off a high starting base) - incremental revenue improvement here is still positive.

    Going forward, Deutsche considers that "investor focus
    should shift to Optus, where there are greater challenges for the new management, such as turning around the consumer and multimedia business".

    The rest of the analysis goes to some 64 pages and takes a little to digest.
 
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