Nigerian Telcos continue to perform well from a top line perspective. Market service revenue growth accelerated (again) in Q1 with both MTN Nigeria and Airtel Africa growing underlying service revenue by ~33% YoY. As expected, EBITDA and profit metrics were weaker (especially for MTN) because of the Naira devaluation in Q1
Yesterday, Singtel announced two data centre related news: 1) S$1.75bn investments in ST Telemedia GDC by the Singtel KKR consortium and 2) a 49-51 JV with Telekom Malaysia to develop a 200MW data centre in Johor, Malaysia. Our thoughts below.
Singtel’s Nxera and TM announced that they will jointly develop a 64MW DC in Johor, operational in 2026. The DC can be scaled up to 200MW, worth RM10b (S$2.9b) in equity value. The above newsflow is positive. We raise TM’s and Singtel’s fair value by RM0.43/share (6%) and S$0.09/share (2%) to incorporate a 64MW DC asset in Johor. Maintain HOLD on TM as the good news is partly priced in. Maintain BUY on Singtel. Blue-sky fair value is RM7.80 (TM) and S$3.16 (Singtel).
KEY HIGHLIGHTS Sector Telecommunications – Regional The Singapore-Malaysia connection – Singtel and Telekom Malaysia embark on data centre expansion in Johor. Update Daiwa House Logistics Trust (DHLT SP/NOT RATED/S$0.575) Growth from logistics assets in Japan and Southeast Asia. TRADERS' CORNER Jardine Cycle & Carriage (JCNC SP): Trading BUY Riverstone Holdings (RSTON SP): Trading B...
Bharti crossing $100bn market cap makes us address the question of which parts of the Bharti/Singtel/Airtel Africa capital structure are most attractive. Bharti has the momentum, but the valuation gap is now extreme. Reversion to the mean will likely happen at some point which means sensible investors in Bharti should now be switching into Singtel (for yield) or Airtel Africa (for growth).
We wanted to flag a large governmental contract win worth A$578m by Optus Enterprise, which was announced last Friday. This follows on from our positive feedback on last week's Non-Deal Roadshow with Singtel and Optus management
We hosted an NDR with Singtel Group CEO, Moon, the acting CEO and the CFO of Optus, Michael Venter and the Head of IR, Adrian Seah, in London and Europe this week. The backdrop to meetings was positive given the bullish guidance issued by the company at their full year results, and the tone of the meetings was pretty positive too.
GREATER CHINA Strategy Alpha Picks: June Conviction Call: Adding KE Holdings and Wharf REIC to our BUY list; hedging with SELL call on BYD. INDONESIA Strategy Alpha Picks: First Month Of Underperformance In 2024: Our picks are EXCL, BSDE, TLKM, ACES, BBTN, CMRY, SIDO and JSMR. MALAYSIA Strategy Alpha Picks: Choices For A “Summer Lull”: Our Alpha Picks trounce the KLCI again. May 24 picks: BAUTO, BURSA, Gamuda, GENM, Lagenda, Mah Sing, MYEG, PMETAL, RGB, and VSI. SINGAPORE Strategy Alpha Picks...
Currency Woes Persist in Nigeria In three operating regions, AIRTELAFRI recorded stronger YoY reporting currency revenue growth in only Francophone Africa . In reporting currency terms, Francophone Africa grew by 12.39% YoY to NGN1.35bn in 2024FYE (vs. 6.21% YoY in 2023FYE). This growth was stronger than 10.34% YoY in 2024FYE recorded in constant currency (vs. 12.66% YoY in 2023FYE), due to currency appreciation in the Central African Franc during the period. Stable Operating Margins: Lower...
For May 24, our Alpha Picks portfolio rose 3.8% mom on an equal-weighted basis, beating the STI by 2.5ppt. The outperformance of our portfolio was driven by YZJ and RSTON, while SCI and CD underperformed in May 24. Our Alpha Picks portfolio has outperformed the STI in four out of the past five months. For Jun 24, we add CENT, CVL and SIAEC while removing CD, MPACT, YZJ and RSTON.
GREATER CHINA Economics PMI May 24 PMI back to contraction. Sector Macau Gaming May 24 GGR up 9% mom. INDONESIA Strategy Alpha Picks: First Month Of Underperformance In 2024 Our picks are EXCL, BSDE, TLKM, ACES, BBTN, CMRY, SIDO, and JSMR. SINGAPORE Strategy Alpha Picks: Strong performance. Add CENT, CVL, SIA...
GREATER CHINA Results KE Holdings Inc (2423 HK/BUY/HK$49.45/Target: HK$55.00) 1Q24: Earnings beat; poised to capture solid recovery in 2Q24. Lenovo Group (992 HK/BUY/HK$11.32/Target: HK$13.50) 4QFY24: Solid results; AI PCs are just around the corner. NetEase (9999 HK/BUY/HK$141.50/Target: HK$180.00) 1Q24: Results in line; 2Q24 game growth could be better than feared. Xiaomi Corp (1810 HK/BUY/HK$18.94/Target: HK$23.80) ...
Despite currency headwinds, Singtel reported higher FY24 underlying net profit (+10% yoy), driven by increased contributions from regional associates and ongoing cost optimisation efforts. Optus continued to perform after the outage incident from price uplifts while Singtel Singapore suffered from weak sentiment. NCS booked higher order wins while the digital infraco segment was weighed down by investment costs. Backed by a lush FY25 dividend yield of 6.8%, we maintain BUY with a target price of...
KEY HIGHLIGHTS Results Singapore Telecommunications (ST SP/BUY/S$2.41/Target: S$2.99): FY24: Results in line, new dividend policy and strategic plan to drive shareholder value. TRADERS’ CORNER Thai Beverage (THBEV SP): Trading BUY Raffles Medical Group (RFMD SP): Trading BUY
Underlying net profit momentum returned to double digits in Q4 as core businesses saw improving trends (notably Optus on cost control & recovering growth), in addition to higher associates’ profits and lower D&A costs. The company has outlined a new Singtel28 strategy, focused on improving its core and scaling growth engines.
In this note we revisit and update our thesis that Enterprise in EM is following an S-Curve, using 2023 reported figures. Enterprise customer growth continues to exhibit an S-Curve, and absolute Enterprise revenues added remains very strong in many EMs despite a slowdown in growth rates. We remain bullish on this space.
Following the announcement of a proposed merger between XL and Smartfren in Indonesia, news media has reported that talks between StarHub and M1 in Singapore have resurfaced in the past couple of days too. Our brief take below, with implications for SingTel.
Airtel Africa has published a decent set of Q4 results. Top line performance remained strong, service revenue growth in local currency came in above consensus expectations and above our expectations. EBITDA trends slowed (but remained decent given the macro context in Q1) and margins came in 1pp below consensus and us.
For Apr 24, our Alpha Picks portfolio rose 0.4% mom on an equal-weighted basis, underperforming the STI slightly by 1.7ppt. It was a mixed performance from our portfolio with the top performers being MPM, BAL and CD while FRKN, LREIT and ST underperformed. Our Alpha Picks portfolio has outperformed the STI in three out of the past four months. For May 24, we add FEHT, MPACT, GENS; remove BAL, LREIT and CLAS.
GREATER CHINA Strategy Alpha Picks: May Conviction Call: Adding CR Beer, Crystal, Geely, Haier, Kuaishou, Ningbo Tuopu, Pinduoduo, Shenzhou, and Tencent to our BUY list, closing out SELL calls. INDONESIA Strategy Alpha Picks: Slight Outperformance In A Bear Market: Our picks are BSDE, TLKM, ACES, BBTN, CMRY, SIDO, JSMR and AKRA. MALAYSIA Strategy Alpha Picks: Well-Positioned For 1Q Results Season: Our April picks again beat the KLCI. May 24 picks: GENM, Inari, Mah Sing, MrDIY, MYEG, Press Meta...
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