We recently attended Singtel’s 2016 Investor Day, where we met up with the management of its regional associates to get a more in-depth understanding of their businesses and outlook. We also paid a visit to its newly-opened FutureNow exhibit, where we were shown the road-map that Singtel is taking to transform itself into “Telco 3.0” by 2020.

Through SMAC – Security, Mobile, Analytics and Cloud – it aims to move beyond a “dumb pipe” business into valueadded services like Digital payments, Smart Living for its Group Consumer segment; Mobile Advertising, Analytics, Premium OTT video for Group Digital Life; and Cyber Security, Safe & Smart Cities, Cloud for Group Enterprise.

In addition, we believe that its regional associates will give Singtel the ability to achieve scale with these services. Maintain BUY with an unchanged SOTP-based fair value of S$4.09.

Source: OCBC Research - 2 Jun 2016