SGX:Z74

Stock Analysis Report

Singapore Telecommunications

Executive Summary

Singapore Telecommunications Limited provides communication, infotainment, and technology services to consumers and small businesses in Singapore, Australia, the United States, Europe, and internationally.

Rewards

Trading at 36.3% below its fair value

Earnings are forecast to grow 26.7% per year

Pays a reliable dividend of 5.37%

Risk Analysis

Has a high level of debt

Dividend of 5.37% is not well covered by earnings

Profit margins (8.5%) are lower than last year (18.7%)



Snowflake Analysis

Average dividend payer with moderate growth potential.


Similar Companies

Share Price & News

How has Singapore Telecommunications's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: Z74 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0.9%

Z74

0.5%

SG Telecom

0.9%

SG Market


1 Year Return

8.6%

Z74

2.6%

SG Telecom

2.1%

SG Market

Return vs Industry: Z74 exceeded the SG Telecom industry which returned 2.5% over the past year.

Return vs Market: Z74 exceeded the SG Market which returned 2.1% over the past year.


Shareholder returns

Z74IndustryMarket
7 Day0.9%0.5%0.9%
30 Day-0.9%-0.08%2.4%
90 Day1.2%-1.2%4.5%
1 Year14.3%8.6%6.4%2.6%6.3%2.1%
3 Year1.4%-13.6%9.3%-2.2%17.4%4.8%
5 Year5.5%-17.7%20.7%1.7%12.8%-6.1%

Price Volatility Vs. Market

How volatile is Singapore Telecommunications's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Singapore Telecommunications undervalued compared to its fair value and its price relative to the market?

35.5%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: Z74 (SGD3.26) is trading below our estimate of fair value (SGD5.11)

Significantly Below Fair Value: Z74 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: Z74 is poor value based on its PE Ratio (36.2x) compared to the Telecom industry average (17.4x).

PE vs Market: Z74 is poor value based on its PE Ratio (36.2x) compared to the SG market (13.5x).


Price to Earnings Growth Ratio

PEG Ratio: Z74 is poor value based on its PEG Ratio (1.4x)


Price to Book Ratio

PB vs Industry: Z74 is overvalued based on its PB Ratio (1.9x) compared to the XA Telecom industry average (1.6x).


Next Steps

Future Growth

How is Singapore Telecommunications forecast to perform in the next 1 to 3 years based on estimates from 18 analysts?

26.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: Z74's forecast earnings growth (26.7% per year) is above the savings rate (1.8%).

Earnings vs Market: Z74's earnings (26.7% per year) are forecast to grow faster than the SG market (6.6% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: Z74's revenue (0.8% per year) is forecast to grow slower than the SG market (5.6% per year).

High Growth Revenue: Z74's revenue (0.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Z74's Return on Equity is forecast to be low in 3 years time (10.9%).


Next Steps

Past Performance

How has Singapore Telecommunications performed over the past 5 years?

-2.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: Z74 has high quality earnings.

Growing Profit Margin: Z74's current net profit margins (8.5%) are lower than last year (18.7%).


Past Earnings Growth Analysis

Earnings Trend: Z74's earnings have declined by -2.9% per year over the past 5 years.

Accelerating Growth: Z74's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: Z74 had negative earnings growth (-54.5%) over the past year, making it difficult to compare to the Telecom industry average (9.8%).


Return on Equity

High ROE: Z74's Return on Equity (5.2%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Singapore Telecommunications's financial position?


Financial Position Analysis

Short Term Liabilities: Z74's short term assets (SGD6.9B) do not cover its short term liabilities (SGD10.6B).

Long Term Liabilities: Z74's short term assets (SGD6.9B) do not cover its long term liabilities (SGD10.9B).


Debt to Equity History and Analysis

Debt Level: Z74's debt to equity ratio (42.6%) is considered high.

Reducing Debt: Z74's debt to equity ratio has increased from 36.8% to 42.6% over the past 5 years.

Debt Coverage: Z74's debt is well covered by operating cash flow (45.1%).

Interest Coverage: Z74's interest payments on its debt are well covered by EBIT (6.8x coverage).


Balance Sheet

Inventory Level: Z74 has a high level of physical assets or inventory.

Debt Coverage by Assets: Z74's debt is not covered by short term assets (assets are 0.6x debt).


Next Steps

Dividend

What is Singapore Telecommunications's current dividend yield, its reliability and sustainability?

5.30%

Current Dividend Yield


Dividend Yield vs Market

company5.3%marketbottom25%2.4%markettop25%5.4%industryaverage3.6%forecastin3Years5.2%

Current dividend yield vs market & industry

Notable Dividend: Z74's dividend (5.37%) is higher than the bottom 25% of dividend payers in the SG market (2.5%).

High Dividend: Z74's dividend (5.37%) is low compared to the top 25% of dividend payers in the SG market (5.41%).


Stability and Growth of Payments

Stable Dividend: Z74's dividends per share have been stable in the past 10 years.

Growing Dividend: Z74's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (194.5%), Z74's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Z74's dividends in 3 years are forecast to be covered by earnings (85.6% payout ratio).


Next Steps

Management

What is the CEO of Singapore Telecommunications's salary, the management and board of directors tenure and is there insider trading?

4.8yrs

Average management tenure


CEO

Sock Koong Chua (62yo)

12.8yrs

Tenure

S$3,537,301

Compensation

Ms. Sock Koong Chua has been the Chief Executive Officer of SingTel Optus Pty Ltd since April 1, 2007. Ms. Chua has been the Chief Executive Officer of Singapore Telecommunications Limited since April 1, 2 ...


CEO Compensation Analysis

Compensation vs Market: Sock Koong's total compensation ($USD2.63M) is below average for companies of similar size in the SG market ($USD5.00M).

Compensation vs Earnings: Sock Koong's compensation has been consistent with company performance over the past year.


Management Age and Tenure

4.8yrs

Average Tenure

56yo

Average Age

Experienced Management: Z74's management team is considered experienced (4.8 years average tenure).


Board Age and Tenure

4.8yrs

Average Tenure

63.5yo

Average Age

Experienced Board: Z74's board of directors are considered experienced (4.8 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Sock Koong Chua (62yo)

    Group CEO

    • Tenure: 12.8yrs
    • Compensation: S$3.54m
  • Weng Hui (64yo)

    President & Chief Operating Officer of AIS

    • Compensation: S$1.80m
  • Allen Lew (64yo)

    CEO of Group Strategy & Business Development and Country Chief Officer of Thailand

    • Tenure: 7.8yrs
    • Compensation: S$3.66m
  • Kuan Moon Yuen (52yo)

    CEO of Consumer Singapore & Group Chief Digital Officer

    • Tenure: 1.4yrs
    • Compensation: S$1.92m
  • Bill Chang (52yo)

    CEO of Group Enterprise & Country Chief Officer of Singapore

    • Tenure: 14.2yrs
    • Compensation: S$1.86m
  • Jeann Low (58yo)

    Group Chief Corporate Officer

    • Tenure: 4.8yrs
    • Compensation: S$1.46m
  • Mark Chong (56yo)

    Group Chief Technology Officer

    • Tenure: 2.8yrs
  • William Woo (55yo)

    Group Chief Information Officer

    • Tenure: 2.4yrs
  • Cheng Cheng Lim (47yo)

    Group Chief Financial Officer

    • Tenure: 4.8yrs
  • Yang Sin

    Vice President of Investor Relations


    Board Members

    • Venky Ganesan (46yo)

      Non-Executive & Independent Director and Chairman of Technology Advisory Panel

      • Compensation: S$294.67k
    • Simon Claude Israel (66yo)

      Non-Executive Chairman & Member of Optus Advisory Committee

      • Tenure: 8.5yrs
      • Compensation: S$984.56k
    • John Morschel (76yo)

      Member of Optus Advisory Committee

      • Compensation: S$68.21k
    • Paul O’Sullivan (58yo)

      Member of Optus Advisory Committee

      • Compensation: S$3.01m
    • David Gonski (65yo)

      Member of Optus Advisory Committee

      • Compensation: S$158.11k
    • Sock Koong Chua (62yo)

      Group CEO

      • Tenure: 12.8yrs
      • Compensation: S$3.54m
    • Swee Lian Teo (59yo)

      Non-Executive & Independent Director

      • Tenure: 4.8yrs
      • Compensation: S$195.00k
    • Check Kian Low (60yo)

      Non-Executive & Lead Independent Director

      • Tenure: 4.5yrs
      • Compensation: S$227.00k
    • Boon Hwee Koh (68yo)

      Member of Technology Advisory Panel

      • Tenure: 5.8yrs
    • Gautam Banerjee (65yo)

      Non-Executive & Independent Director

      • Tenure: 1.8yrs

    Company Information

    Singapore Telecommunications Limited's company bio, employee growth, exchange listings and data sources


    Key Information

    • Name: Singapore Telecommunications Limited
    • Ticker: Z74
    • Exchange: SGX
    • Founded: 1992
    • Industry: Integrated Telecommunication Services
    • Sector: Telecom
    • Market Cap: S$53.871b
    • Shares outstanding: 16.32b
    • Website: https://www.singtel.com

    Number of Employees


    Location

    • Singapore Telecommunications Limited
    • 31 Exeter Road
    • No. 19-00 Comcentre
    • Singapore
    • 239732
    • Singapore

    Listings

    TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
    SNGN.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDNov 1993
    Z74SGX (Singapore Exchange)YesOrdinary SharesSGSGDNov 1993
    SIT4DB (Deutsche Boerse AG)YesOrdinary SharesDEEURNov 1993
    Z77SGX (Singapore Exchange)YesOrdinary SharesSGSGDNov 1993
    SGAP.YOTCPK (Pink Sheets LLC)SPON ADR NEW06USUSDAug 1995

    Biography

    Singapore Telecommunications Limited provides communication, infotainment, and technology services to consumers and small businesses in Singapore, Australia, the United States, Europe, and internationally. It operates through three segments: Group Consumer, Group Enterprise, and Group Digital Life. The Group Consumer segment engages in the carriage business, including mobile, pay TV, fixed broadband, and voice, as well as equipment sales. The Group Enterprise segment offers mobile, equipment sales, fixed voice and data, managed, cloud computing, cyber security, IT, and professional consulting services. The Group Digital Life segment is involved in the digital marketing, regional premium OTT video, and advanced analytics and intelligence businesses. The company also operates a venture capital fund that focuses its investments on technologies and solutions; and offers ICT solutions and marketing technology services. In addition, it offers inSing.com that provides hyper-local content, user reviews, and editorials, as well as business or service information; and Trustwave that enables businesses fight cybercrime, protect data, and reduce security risk. The company was incorporated in 1992 and is headquartered in Singapore. 


    Company Analysis and Financial Data Status

    All financial data provided by Standard & Poor's Capital IQ.
    DataLast Updated (UTC time)
    Company Analysis2020/01/20 12:45
    End of Day Share Price2020/01/20 00:00
    Earnings2019/09/30
    Annual Earnings2019/03/31


    Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.