Company Name: SINGTEL
Research House: Golman Sachs
Goldman Sachs raises SingTel’s (Z74.SG) target price to $3.67 from $3.53 for 18% potential return, after it upgrades associate Bharti Airtel (532454.BY) to Buy, ups its target by 25% to INR430.
Also revises SingTel’s EPS estimates for FY11, FY12, FY13 by minus 1.5%, +2.4%, +2.9%. Notes “with SingTel effectively holding 32% of Bharti’s shares, our Bharti upgrade is material to the company’s valuation.”
Adds, Bharti upgrade due to changes in regulatory environment in India, which will favor market leader.
Notes on revised SOTP, SingTel’s investment in Bharti worth $0.94/share, accounts for 26% of valuation, India/Africa now emerges as 2nd largest component of SingTel’s home market valuation.
Adds, key risks include re-farming of India’s 900 Mhz spectrum, creating greater competition for Bharti, also pay TV growth which struggling to gain traction, high content cost of BPL which hurting Singapore profitability.
Shares last +0.3% at $3.08.
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