Singtel, Simba owner see positive share price action amid S’pore’s telco shake-up

SINGAPORE – An unexpected shake-up in the telecoms sector in Singapore this week has put its listed players – Singtel, StarHub, M1 owner Keppel and Simba owner Tuas – firmly in the spotlight.

StarHub and Keppel were the laggards based on share price action. Singapore’s largest telco Singtel ended the week higher after an initial fall following the Aug 11 announcement of Simba’s acquisition of M1. Simba’s parent company Tuas saw a big jump in its share price on the Australian Securities Exchange compared with last week.

StarHub’s acquisition of MyRepublic’s broadband business announced on Aug 12 was met with lukewarm response from investors. On Aug 14, it posted a poorer financial performance for the first half of 2025 compared with the same period last year.

The telco closed at $1.18 on Aug 15, down 3.28 per cent from last week’s close. It reported a 41.7 per cent drop in profit for the first half of 2025, at $47.5 million compared with $82.1 million in the corresponding year-ago period.

Analysts said StarHub could face headwinds in the immediate term after market consolidation.

Morningstar rated the stock three stars – the investment research house’s mid-level rating for fair risk-adjusted returns – based on its fair value estimate and low uncertainty. It reduced its 2025 forecast while raising it from 2027 as it expects the mobile market to stabilise with better market structure.

CGS International retained its “hold” recommendation, citing the pace of market repair and cost optimisation, as well as merger and acquisition costs, as potential risks.

At its results briefing on Aug 14, StarHub remained bullish on its aggressive strategy to squeeze smaller mobile virtual network operator (MVNO) players.

It said it would strive to be price-competitive with its low-cost arm and MVNO subsidiary eight, and look at areas to deliver higher value for customers such as more roaming allowances.

Due to this shift, the company reduced its earnings before interest, depreciation, taxes and amortisation outlook for the financial year 2025 to between 88 per cent and 92 per cent of its 2024 figures.

Shares of asset manager and operator Keppel fell after it announced its sale of M1, with some observers noting that it took a $222 million accounting loss for the sale. Aug 11 was also the ex-date for Keppel’s dividend of 15 cents.

However, analysts remain optimistic about Keppel’s outlook as it looks to capitalise on new digital infrastructure with the close to $1 billion in cash unlocked from the divestment.

Keppel also announced its $500 million share buyback programme at the results briefing on July 31, along with an interim cash dividend of 15 cents per share – which are positive signs for the company, the analysts noted.

The company’s counter closed at $8.45 on Aug 15, down 1.52 per cent from last week’s close.

HSBC and CGS International reiterated their “buy” ratings for the firm, citing the higher than estimated sale value of M1 as a boost for Keppel, as well as its ability to monetise sizeable assets.

Singtel saw its shares jump 3.02 per cent from Aug 8, closing at $4.10 on Aug 15.

It initially dipped on Aug 11 after the announcement of Simba’s acquisition of M1, dropping 1.76 per cent from last week to this week’s lowest of $3.91.

But its shares rebounded on Aug 13 after it posted a higher net profit for its first quarter ended June 30, at $2.9 billion, a 317.4 per cent rise from $690 million in the year-ago period.

Analysts agreed that market consolidation could be beneficial for Singtel, saying the Simba-M1 merger could ease price competition and improve average revenue per user, which should bode well for the industry.

But they were split on their outlook for Singtel.

HSBC held its “buy” recommendation, forecasting a 1.4 per cent increase in net profit for financial year 2027 underpinned by growth in Singtel’s data centre capacity and increased revenue for its Australian subsidiary Optus.

CGS International maintained its “hold” call. It said significant asset monetisation exercises and increase in profits in key markets could be met with a sharp Singapore dollar appreciation, as well as increased competitive pressures and regulatory shifts in core markets.

Tuas has had the best run among the players involved. Since resuming trading on Aug 12 after the M1 announcement, it has jumped 38.1 per cent from last week, closing at A$7.61 on Aug 15 on the Australian exchange.