SingTel has received an upgrade from Hold to Add by CGS International Equities, following its Investor Day on 29 August 2025. The target price has been increased to S$4.80, up from S$4.10, driven by an improved outlook for its regional data centre business and better-than-expected performance from Optus and Bharti. The company’s strategic plan, SingTel28, and the extension of its value realisation dividends (VRD) programme have also contributed to this positive reassessment.
The report highlights that SingTel’s regional data centres are experiencing strong demand, with management expecting over 200MW of capacity by 2026. Additionally, SingTel plans to expand its data centre footprint to Japan in collaboration with Hitachi. Optus’s expanding network in Australia has led to a 33% year-on-year increase in earnings for the first quarter of FY26. Bharti, SingTel’s associate, is also benefiting from market improvements in India and increased demand for data centre services in India and Africa.
CGS International Equities notes that SingTel’s shares are currently trading at 22 times the forecasted price-to-earnings ratio for FY27, with a dividend yield of 4.6% for FY26. The report suggests that further sales of SingTel’s stake in Bharti, along with continued VRD payments, could act as catalysts for a re-rating of its shares. However, potential risks include increased competition in Singapore and Australia, large acquisitions, and regulatory changes affecting cash flow and earnings.
In conclusion, SingTel’s strategic initiatives and positive market conditions have led to an optimistic outlook, with the company well-positioned for future growth.
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