Singtel has announced a strategic focus on expanding its data centre operations, with a projected 13% upside in its share price target, now set at S$4.70. The company’s management anticipates that the earnings before interest, taxes, depreciation, and amortisation (EBITDA) from its data centre business will double by the financial year 2028, driven by increased demand from artificial intelligence cloud services.
The expansion of Singtel’s data centres is seen as a significant growth opportunity for its Digital Infraco business. The company has already secured a substantial pre-sold capacity, which positions it well for future growth. This development is part of Singtel’s broader strategy to enhance its return on invested capital (ROIC), improve capital management, and execute earnings effectively.
Singtel remains a top pick in the sector due to these strategic initiatives. The company’s focus on data centres aligns with the growing demand for digital infrastructure, particularly as businesses increasingly rely on cloud-based solutions. The anticipated growth in EBITDA underscores the potential for long-term profitability and shareholder value.
As Singtel continues to invest in its data centre capabilities, the company is poised to capitalise on the rising demand for digital services. This strategic move not only strengthens Singtel’s market position but also enhances its appeal to investors seeking growth in the digital infrastructure sector. The company’s commitment to improving its financial metrics and operational efficiency further supports its positive investment outlook.
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