Singtel Soars Over 30% YTD, What Lies Ahead for Singapore's Telecom Sector?
Global communication indices have outperformed broader global benchmarks this year, with Singapore telecommunications stocks standing out: Singtel and AIS TH SDR have surged by 33.84% and 48.68% respectively, while NetLink and StarHub have each risen by over 10%.
The telecommunications industry has been actively implementing and expanding strategic transformation plans in recent years, including Singtel28, StarHub's Dare+, and NetLink's five strategic priorities.
Furthermore, Asian telecom operators are likely to seek opportunities presented by the rise ofAIand digitalization to unlock the value of their data center assets. According to Kearney, the data center market in Southeast Asia is projected to grow by 17% over the next five years, compared to 12% in other regions, attracting investments of $9 billion to $13 billion. Additionally, substantial investments from hyperscale enterprises in Asia can accelerate digitalization and meet data localization demands, thereby enhancing the enterprise business of telecom companies.
Among them, Singtel is particularly noteworthy:
Despite experiencing a brief pullback in mid-September, this telecommunications giant has surged over 30% year-to-date, ranking just behind YZJ Shipbuilding, SATS, and DBS Bank among STI constituents.
In 2024, Singtel's average daily trading turnover YTD skyrocketed by 90%, increasing from SGD 50 million in 2023 to SGD 95 million in 2024. The company highlighted a strong start to fiscal year 2025, with improvements in core business operations, the launch of a new data center project in Malaysia, and a 5.4% growth in underlying net profit for the first quarter of fiscal year 2025 (ending June 30), reaching approximately SGD 600 million. Previously, the company announced its Singtel28 growth plan in May. On a constant currency basis, underlying net profit is projected to increase by 8.7%. J.P. Morgan has recommended an Overweight rating on Singtel, believing there is room for the company to enhance dividends through its cash reserves, improve cash flows in certain regions, and further recycle capital.
Since the end of August, institutional investors have net purchased SGD 1.4 billion in Singapore stocks, marking a significant reversal from a net outflow of SGD 1.3 billion earlier this year. By mid-October, Singtel ranked second among the top 10 stocks with the highest net inflows from institutions, just behind DBS Bank.
What's next?
According to Mordor Intelligence, the Singapore telecommunications market is expected to reach USD 2.84 billion by 2024 and USD 3.04 billion by 2029, with a compound annual growth rate (CAGR) of 1.41% from 2024 to 2029.
Looking ahead, global portfolio managers believe that the recovery in the telecommunications services sector, advancements in AI, and reasonable valuations indicate further growth potential for the industry. Deloitte also identifies key drivers for 2024, which include continued operational efficiency transformations, generativeAI, broadband connectivity, cloud competition, and 5G expenditures.
However, challenges such as intensified competition, cybersecurity threats, regulatory developments, and shifts in consumer and business preferences remain significant global industry hurdles, Deloitte added.
Mooers, do you have a positive outlook on the future of the Singapore telecommunications sector? Please leave your thoughts in the comments section~
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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104721447 :
Chan Hin Pui :![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
Fundamentalist : Quickly run
L Yoyo : scores
Slim Hong :![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
leoshi : Singtel is good and can be purchased.
l0lBElBgG : k
天生赢家贵公子 : $Singtel (Z74.SG)$ Regarding the future of the telecommunications sector in Singapore, I hold a relatively optimistic attitude, especially towards the performance of SingTel. In the Singapore market, the telecommunications industry has relatively high stability, especially companies like SingTel, which are leading enterprises with a large customer base and strong infrastructure. This provides the company with a relatively stable source of income, especially in the current economic environment, where many investors tend to choose these stable high dividend companies to safeguard long-term investment returns.
![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
SingTel not only has a strong market share domestically in Singapore, but its business also extends globally, especially to other countries in the Asia-Pacific region. This diversified market presence brings more growth opportunities, despite existing challenges. For example, intensifying competition in the telecommunications industry and the significant investment demands of 5G networks may impact short-term profits. However, in the long run, the widespread adoption of 5G and the trend of digital transformation will bring new revenue growth points for SingTel.
From a shareholder return perspective, SingTel's stable dividend policy over the years has made it a favorable choice for many investors, especially investors like myself who prefer high dividend blue-chip stocks to secure long-term stable cash flow. Therefore, I believe that SingTel remains an attractive option in the telecommunications sector, despite potential fluctuations in the short term. It still remains competitive in terms of long-term growth potential and stable dividend returns.
Andjoy99 :![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
Supermengg :
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