Month: May 2011
May 2011
Results Announcement
- 4 May 11 : StarHub (Q111) – EPS 4.03ct ; DPS 5ct
- 11 May 11 : MIIF (Q111) – No Div Payout as Semi-Annual Payout Policy
- 11 May 11 : STEng (Q111) – EPS 3.65ct
- 12 May 11 (AM) : SingTel (Q411) – EPS 6.23ct (todate 24.02ct) ; DPS 9ct (Final) + 10ct (Special) (todate 25.8ct)
- 12 May 11 (AM) : SPAusNet (2H11) – DPS A4ct (todate A8ct)
- 12 May 11 : SBSTransit (Q111) – EPS 3.84ct
- 13 May 11 : ComfortDelgro (Q111) – EPS 2.4ct
- 16 May 11 (AM) : SATS (Q411) – EPS 4.6ct (todate 17.4ct) ; DPS 6ct (Final) + 6ct (Special) (todate 17ct)
STI = 3159.93 (+19.33)
|
Stock |
Period |
EPS cts |
DPS cts |
Mkt |
Yield |
PE |
Div Breakdown |
|
SPH |
FY10 (Aug) |
31 |
27 |
$3.86 |
6.995% |
12.45 |
Interim 7ct ; Final 9ct + 11ct (Special) |
|
SingPost |
FY11 (Mar) |
8.369 |
6.25 |
$1.14 |
5.482% |
13.62 |
Q1, Q2, Q3 1.25ct ; Q4 2.5ct |
|
STI ETF |
Dec-10 |
— |
3.5 |
$3.22 |
2.174% |
— |
Dec10 3.5ct ; Jun10 3ct |
|
SATS |
FY11 (Mar) |
17.4 |
17 |
$2.62 |
6.489% |
15.06 |
Final 6ct + Special 6ct ; Interim 5ct |
|
ST Engg |
FY10 (Dec) |
16.21 |
14.55 |
$2.97 |
4.899% |
18.32 |
Final 4ct + 7.55ct (Special) ; Interim 3ct |
Transport
|
Stock |
Period |
EPS cts |
DPS cts |
Mkt |
Yield |
PE |
Div Breakdown |
|
SBSTransit |
FY10 (Dec) |
17.63 |
8.80 |
$1.91 |
4.607% |
10.83 |
Interim 4.5ct ; Final 4.3ct |
|
ComfortDelGro |
FY10 (Dec) |
10.95 |
5.50 |
$1.47 |
3.741% |
13.42 |
Interim 2.7ct ; Final 2.8ct |
|
SMRT |
FY11 (Mar) |
10.6 |
8.5 |
$1.91 |
4.450% |
18.02 |
Interim 1.75ct ; Final 6.75ct |
TELCO
|
Stock |
Period |
EPS cts |
DPS cts |
Mkt |
Yield |
PE |
Div Breakdown |
|
SingTel |
FY11 (Mar) |
24.02 |
25.8 |
$3.21 |
8.411% |
13.36 |
Interim 6.8ct ; Final 9ct + Special 10ct |
|
M1 |
FY10 (Dec) |
17.5 |
17.5 |
$2.43 |
7.202% |
13.89 |
Interim 6.3ct ; Final 7.7ct + Special 3.5ct |
|
StarHub |
FY10 (Dec) |
15.34 |
20 |
$2.79 |
7.168% |
18.19 |
Q1 5ct ; Q2 5ct ; Q3 5ct ; Q4 5ct |
Funds / Infrastructure
|
Stock |
Period |
DPS cts |
Mkt |
Yield |
NAV |
Div Breakdown |
|
SPAus |
2H11 (Mar-11) |
A4.0 (Gross) |
$1.200 |
8.807% |
A$0.89 |
2H11 A4.0ct ; 1H11 A4.0ct |
|
MIIF |
2H – Dec10 |
1.50 |
$0.585 |
5.128% |
$0.82 |
2H10 1.5ct ; 1H10 1.5ct |
* SPAus DPU in A$. Yield is Calculated Using Latest Exchange Rate (1.3211) fm Yahoo
NOTES :
- Mkt Price is as on 31-May-11
- SATSvcs : Q411 (Mar11) – Final 6ct + Special 6ct ; Q211 (Sep10) – Interim 5ct
- SPAus : 2H11 (Mar11) – A4ct (before tax) / A3.7721ct (after tax) ; 1H11 (Sep10) – A4ct (before tax) / A3.7772ct (after tax)
- SingTel : 2H11 (Mar11) – Final 9ct + Special 10ct ; 1H11 (Sep10) – Interim 6.8ct
- StarHub : Q111 (Mar) – 5ct
- SingPost : Q411 (Mar11) – 2.5ct ; Q311 (Dec10) – 1.25ct ; Q211 (Sep10) – 1.25ct ; Q111 (Jun10) – 1.25ct
- SMRT : Q411 (Mar) – Final 6.75ct ; Q211 (Sep10) – Interim 1.75ct
- SPH : 1H11 (Feb) – 7ct
- MIIF : 2H10 (Dec) – 1.5ct ; 1H10 (Jun) – 1.5ct
- ST Engg : 2H10 (Dec) – 4ct (Final) + 7.55ct (Special) ; 1H10 (Jun) – 3ct
- ComfortDelgro : Q410 (Dec) – 2.8ct ; Q210 (Jun) – 2.7ct
- SBSTransit : Q410 (Dec) – 4.3ct ; Q210 (Jun) – 4.5ct
- StarHub : FY11 Div Guidance – 5ct/Q
- M1 : 2H10 (Dec) – Final 7.7ct + Special 3.5ct ; 1H10 (Jun) – Interim 6.3ct
StarHub – BT
StarHub has no plans for special dividend: CEO
StarHub, Singapore’s second-biggest telecom firm, is unlikely to follow larger rival Singapore Telecommunications (SingTel) with a special dividend this year, its chief executive said on Tuesday.
‘I don’t think we will be doing anything special this year,’ Neil Montefiore told Reuters on the sidelines of a telecom conference in Dublin.
‘We take a three-year view on the free cash flow. At the moment we are paying five (Singapore) cents a quarter. That gives a dividend yield at the moment of around 7-8 per cent depending on the share price.’
He added: ‘If we raise the dividend rate it has to be sustainable.’
Earlier this month, SingTel issued a final ordinary dividend of 9 cents and a special dividend of 10 cents, bringing the annual dividend to a record 25.8 cents a share, or a yield of 8 per cent based on its recent share price.
Mr Montefiore said that StarHub expected single digit growth in full-year revenues and net profits this year. In the first quarter of this year, the group reported a 62 per cent increase in net profit and flat operating revenues.
StarHub estimates that around 20,000 households in Singapore have taken up the next generation broadband network that is currently being rolled out in Singapore.
‘It launched in August of last year and we think somewhere around 20,000 homes have taken the fibre now,’ Mr Montefiore said. ‘We estimate that is the take-up across the whole market.
‘We heard the regulator is going to release the numbers quite soon but we haven’t got them yet.’
The new broadband network, which will be fully deployed by 2012, could provide Singapore users with Internet connection speeds that are up to 10 times faster than the current 100 megabytes per second. – Reuters
SingTel – CIMB
Telkom to buy SingTel’s stake in Telkomsel Government wants Telkomsel back
Maintain Underweight on sector. We maintain our UNDERPERFORM rating for SingTel and urge investors to sell into expected strength in its share price on news that Telkom Indonesia plans to buy SingTel’s 35% stake in Telkomsel. Should the acquisition take place, we believe SingTel will return the proceeds to shareholders. However, any acquisition will take time and SingTel’s share price could be de-rated after the initial euphoria. Telkom remains an UNDERPERFORM with an unchanged DCF-based target price of Rp7,400 (WACC 12.2%) as the acquisition would deplete its cash, ratchet up its gearing, and possibly affect its plans for a share buyback. Axiata remains our top regional telco pick.
The news
Indonesia’s State-Owned Enterprise (SOE) Ministry has asked Telkom Indonesia to buy SingTel’s 35% stake in Telkomsel. The Minister Mr Mustafa Abubakar said the acquisition will “strengthen the position of Telkom.” Eddy Kurnia, Telkom’s Head of Corporate Communication said, “We support the statement by the SOE Minister because it was expected by Telkom or the shareholders.” But he added that it would take a while to buy back the shares and did not provide a timeframe.
Comments
A surprise. The news surprised us although rumours had been circulating. It is indeed puzzling why the government is now eyeing Telkomsel. This comes after ST Telemedia, another Singapore government-linked corporation, sold its stake in Indosat after Indonesia ruled that Indosat and Telkomsel were fixing prices. We suspect Telkom’s intention to own 100% of Telkomsel is related to SingTel’s reluctance for Telkomsel to sell its towers to Telkom. Telkom had intended to park all the towers of its units under Daya Mitra and eventually list this entity. Taking full control of Telkomsel could pave the way for this transaction. Telkomsel controls the largest number of towers in Indonesia, about 20k or 40% of the industry total.
Negative for Telkom. This news is negative for Telkom because SingTel will not relinquish its stake cheaply, in our view. Having said that, the government may find means to compel SingTel or the Singapore government to do so. The purchase could deplete Telkomsel’s cash pile of Rp10tr (US$1.25bn), weaken its balance sheet of 0.2x net debt/EBITDA and possibly affect its plans for a share buyback.
Assuming Telkom buys Telkomsel at 16x CY11 P/E or Rp72tr (US$8.5bn) and funds 70% of this with debt, Telkom’s gearing and net debt/EBITDA will rise from 0.2x and 0.3x to 1.1x and 1.4x respectively. While Telkomsel is the growth driver for Telkom, we believe Telkom should return excess cash to shareholders instead of sinking more money into Telkomsel given the lacklustre performance of Telkomsel and a maturing mobile industry. We also believe SingTel has been injecting talent and its regional experience into Telkomsel, and has been instrumental in driving Telkomsel’s operations.
Positive for SingTel’s shareholders, as proceeds from the sale are likely to be returned to them. Assuming an acquisition price of US$8.5bn or S$10.1bn, the sale would raise S$10.1bn (US$8.4bn) or a hefty S$0.70/SingTel share. Telkomsel has not been the growth driver it used to be as the Indonesian telco market matures, having lost market share. However, this may be a protracted transaction as price will be a key contention, in our view.
Valuation and recommendation
Sell SingTel into strength. We reiterate our UNDERPERFORM on SingTel and urge investors to sell into expected strength in its share price on news that Telkom Indonesia plans to buy its 35% stake in Telkomsel. Should the acquisition take place, we believe SingTel will return the proceeds to shareholders. However, any acquisition may take time and SingTel’s share price could be de-rated after the initial euphoria. Lastly, even if Telkom acquires Telkomsel at a 30% premium (i.e. 16x CY11 earnings) to our valuation of Telkom (based on 12.5), our SOP valuation for SingTel would only rise by S$0.15/share or 5%. SingTel continues to face competitive headwinds in Australia, margin pressure in Singapore and earnings drags in India, in our view.
Telkom remains an UNDERPERFORM with an unchanged DCF-based target price of Rp7,400 as the acquisition would deplete its cash, ratchet up its gearing, and possibly affect its plans for a share buyback. We believe Telkom’s outlook remains poor with declining fixed-line revenue and a lacklustre mobile performance due to a maturing industry and Telkomsel’s loss of market share. Axiata remains our top regional telco pick.
M1 – OCBC
Deployment of LTE by 1Q12
Deployment of LTE by 1Q12. M1 Ltd recently announced that it will deploy South East Asia’s first commercial LTE (Long Term Evolution) network in Singapore by 1Q12. M1 has awarded a five-year contract valued at S$280m to Huawei – a leading provider for next-generation telecommunications network solutions for global mobile operators – to provide turnkey LTE solution; this includes installation of macro base stations, distributed base stations and Evolved Packet Core (EPC), for M1’s island-wide next-generation network.
Investing for the future. LTE is capable of delivering downlink speed of up to 300Mbps (versus the current HSPA network which supports 21Mbps) and is specially designed for the efficient carriage of data traffic. We view this development positively, as the demand for mobile data transmission will only continue to grow, fueled by the proliferation of smart devices (phones, tablets and other personal entertainment devices) and also the “stickiness” of new social media. Hence, the network will enable rich multi-media applications such as video conferencing, high-definition content transmission, highspeed video downloads and social network updates.
Timely due to shifting preferences. Recall that M1 had previously paid S$21.7m to secure a lot of the 1800 MHz spectrum, which we understand could also be used for LTE. We view these recent developments as timely due to shifting preferences. As mentioned earlier, we have observed a growing preference towards using instant messaging (via the generous data plans currently) to communicate versus voice – the traditional money churner for the mobile operators. For M1, we note that the post-paid monthly MOU (minutes of usage) has eased to 356 minutes in 1Q11 (down from 364 minutes in 4Q10), while post-paid monthly ARPU has dipped to S$56.1 in 1Q11 from S$58.5 in 4Q10 and S$59.7 in 1Q10. But once the next-gen network is in place, we believe that M1 should be able to offer differentiated services and capture these changing preferences; of course, this is assuming that there are available “4G” devices that can fully utilize the LTE network.
No additional capex needed. In any case, we understand that this LTE move has always been part of M1’s upgrading plans, and hence we do not expect M1 to incur any extra capex this year (or even the next) i.e. capex spending should remain around S$100m, implying no impact on its ability to pay out 70% of its recurring earnings as dividends. As before, we continue to like M1 for its defensive earnings and good dividend yield, hence we maintain BUY with a DCF-based fair value of S$2.79.
M1 – OCBC
Deployment of LTE by 1Q12
Deployment of LTE by 1Q12. M1 Ltd recently announced that it will deploy South East Asia’s first commercial LTE (Long Term Evolution) network in Singapore by 1Q12. M1 has awarded a five-year contract valued at S$280m to Huawei – a leading provider for next-generation telecommunications network solutions for global mobile operators – to provide turnkey LTE solution; this includes installation of macro base stations, distributed base stations and Evolved Packet Core (EPC), for M1’s island-wide next-generation network.
Investing for the future. LTE is capable of delivering downlink speed of up to 300Mbps (versus the current HSPA network which supports 21Mbps) and is specially designed for the efficient carriage of data traffic. We view this development positively, as the demand for mobile data transmission will only continue to grow, fueled by the proliferation of smart devices (phones, tablets and other personal entertainment devices) and also the “stickiness” of new social media. Hence, the network will enable rich multi-media applications such as video conferencing, high-definition content transmission, highspeed video downloads and social network updates.
Timely due to shifting preferences. Recall that M1 had previously paid S$21.7m to secure a lot of the 1800 MHz spectrum, which we understand could also be used for LTE. We view these recent developments as timely due to shifting preferences. As mentioned earlier, we have observed a growing preference towards using instant messaging (via the generous data plans currently) to communicate versus voice – the traditional money churner for the mobile operators. For M1, we note that the post-paid monthly MOU (minutes of usage) has eased to 356 minutes in 1Q11 (down from 364 minutes in 4Q10), while post-paid monthly ARPU has dipped to S$56.1 in 1Q11 from S$58.5 in 4Q10 and S$59.7 in 1Q10. But once the next-gen network is in place, we believe that M1 should be able to offer differentiated services and capture these changing preferences; of course, this is assuming that there are available “4G” devices that can fully utilize the LTE network.
No additional capex needed. In any case, we understand that this LTE move has always been part of M1’s upgrading plans, and hence we do not expect M1 to incur any extra capex this year (or even the next) i.e. capex spending should remain around S$100m, implying no impact on its ability to pay out 70% of its recurring earnings as dividends. As before, we continue to like M1 for its defensive earnings and good dividend yield, hence we maintain BUY with a DCF-based fair value of S$2.79.