Singtel’s 3QFY21 operating revenue fell 3% YoY to SGD4.2b but increased 9% QoQ; excluding NBN migration revenue, operating revenue, EBITDA and EBIT increased 10%, 3% and 10% respectively QoQ, largely due to Australia Consumer and Amobee. Singapore Consumer operating revenue fell 11% YoY (though up 8% QoQ), with border restrictions impacting usage of roaming and prepaid services.

Group Enterprise revenue remained resilient despite disruptions and a challenging macro environment. Post-tax associate contributions rose 8% (or 11% in constant currency) – this came on the back of Airtel’s improved operating performance which was lifted by higher mobile ARPU and strong 4G additions in India.

All considered, we believe Singtel continues to remain a viable option to play the reopening of regional economies, with the return of the travel market likely to give a boost to its mobile operations, especially in Singapore. Potential asset monetization would be another catalyst.

In the more medium-term, we would also look forward to potential mobile ARPU accretion from the migration to 5G. BUY.

Source: OCBC Research - 15 Feb 2021