WHAT'S UP SINGTEL

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Chart 1

The price of Singtel, a defensive stock have taken quite a beating since mid-2016 and it seems there is still no sign of a bottom.

Out of curiosity, invested a little time to analyse and attempt to understand what is happening within the company these past years.

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Chart 2

Revenue had been falling since FYMar2012 along with gross and operating margin.

Net margin actually improves. This is due to contribution from SingTel associates Airtel, Telkomsel, Globe and AIS that sustain net margin during these periods. 

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In FYMar-2018, a divestment of NetLink Trust to 25%,nett the company about $2.0B pushing net margin to 31% from 23% a year earlier.

 

Chart 3

EBITDA from Airtel has been declining the last few years.

Telkomsel earning is showing some strain as well.

That is, the foundation holding up earning is weakening.

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1HSep-2018

Revenue down about 2%. 

Gross margin continue to show weakness.

Airtel turned from profit to losses of $240M. 

Telkomsel earning fell from $754M to $528M. 

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Collectively, these events and weak market sentiment likely explain the continual decline in Singtel share price.