Are Singtel shares worth buying now?

• Singapore Telecommunications (SGX: Z74) share price closed 2.3% lower on Monday (30 May 2022)
• The stock has declined by 4% in the last one month alone, amid economic concerns related to China’s stringent Covid-19 approach
• The telco saw net profit attributable to shareholders burgeon to S$994.5 million in the second half of 2022
• Keen to trade Singtel shares? Open an account with IG to long or short the stock now

Singtel share price: what’s the latest?

Singtel’s share price fell by as much as 2.6% on Monday, following the release of its results for the second half of 2022.

The telco’s stock is down some 4% in the last one month alone, amid ongoing concerns of the global economic impact from China’s Covid Zero stance.

However, share price is up by nearly 14% on a year-to-date basis.

In terms of outlook, Singtel shares have a consensus rating of ‘outperform’ and an average price target of US$3.10 (equating to a 17.4% upside from its last traded price of US$2.64), based on the latest SGX StockFacts data.

The latest investment thesis came from UOB’s equity research team, who reiterated a ‘buy’ call on the stock on 30 May 2022, while keeping price target unchanged at S$2.90 a share.

How did Singtel fare in H2 2022?

Last Friday, the telecommunications company reported its second half financial results for FY2022, where it saw net profit attributable to company shareholders burgeon over 10 times year-on-year to S$994.5 million.

However, Singtel’s operating revenue for the same period dropped by 6.5% year-on-year to S$7.69 billion (from S$8.22 billion in H2 2021).

This was largely because of declining equipment sales, and a drop in revenue from its mobile, data and internet, fixed voice and pay-television segments.

Across the full year, Singtel’s net profit grew two and a half times to S$1.95 billion. This was primarily due to a net exceptional gain from the group’s divestment of its 70% equity stake in Australia Tower Network compared to a net exceptional loss last year.

Underlying net profit improved 11% to S$1.92 billion, mainly lifted by Airtel’s resilient turnaround.

‘Our mobile business in Australia and our regional associate Airtel capped the year with solid performances to deliver good results,’ Mr Yuen Kuan Moon, Group CEO.

‘Roaming revenues are showing early signs of recovery with the return of business and leisure travel, and NCS experienced strong demand from the accelerated push by government and enterprises to digitalise. We expect this momentum to continue into the new financial year,’ he added.

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