Potential Consolidation in Australia; Maintain HOLD

• TPG Australia disclosed it is in potential “merger of equals” talks with unlisted Vodafone Australia. Although there is no certainty the transaction will take place, Singtel’s share price has reacted positively to the news. 
• A successful transaction could affect 24% of our DCF-based SOTP of SGD3.46 vestors.io) remains our preferred pick in the Singapore telco space as we believe its de-rating has been overdone.

Source: Maybank Kim Eng Research - 23 Aug 2018