SingTel's 1Q16 core net profit grew 1.6% yoy (-5.7% qoq). This was in line at 24% of our FY16 forecast (consensus: 23%). Associate earnings rose, led by Telkomsel, AIS and Globe. Optus's earnings contribution declined due to the 11% yoy weaker Aussie dollar vs. Singapore dollar. Singapore profits fell due to higher depreciation and the cessation of fibre rollout/maintenance revenue, but partly cushioned by narrower DL losses. We upgrade SingTel from hold to Add with an unchanged SOP-based target price. The share price slumped 11.2% over the past three weeks on the back of general market weakness and now offers 15.0% total return (including 4.5% dividend yield). Catalysts are a rebound in regional currencies and earnings improvements at Optus.