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ALP STOCK INVESTMENT CLUB – 6 July 2015
(Date) Close: $4.27
Target price: $4.50
1.) Sector: Telecommunication
2.) Core business structure: Singtel Group is structured into three business segments, namely Group Consumer, Group Enterprise and Group Digital Life ( From 1 April 2015, Group Digital Life sharpened its digital business strategy to focus on three key businesses – digital marketing (Amobee), regional premium video (HOOQ) and advanced analytics and intelligence capabilities (DataSpark), in addition to strengthening its role as Singtel’s digital innovation engine through Innov8.)
3.) Segment that generate the highest Revenue: Group Consumer , group enterprise and group digital life have generated 61.3%, 37.7% and 1% of the group revenue respectively.
4.) Countries that the business operates: Singapore, Australia
5.) Challenges: Acquisition risks arising from integrating newly acquired businesses with Singtel’s own operations.
6.) Strengths: Having the resources to enable their customers to have the latest technologies to keep their businesses ahead. They also have an extensive data network and infrastructure that can handle the offices in 40 cities in 22 countries worldwide.
7.) Significant events: Various upgrades in the speed of 4G, 3G mobile services. Higher speed of internet boardband avaliable at a more affordable price to the consumers.
8.) GTI Ranking: 2
10.) Recommendation: Sell. I believe that selling the stocks would be a wise choice now as an additional telecom, may be introduced into Singapore as Singapore’s 4th telecom company. This may have an effect on Singtel, as the new telecom would absorb a portion of the existing market share in Singapore. I believe it is recommended to purchase stocks from Singtel after the 4th telecom company has been introduced, as Singtel would definitely have counter measures to compete with the new competitor in the market which might boost investors’ confidence. Moreover, Singtel has a larger revenue and is able to handle the competition.
COMPILED BY: Berek Shih
DISCLAMER: Readers should not rely solely on information published and should seek independent financial advice prior to making any investment decision. The publisher accepts no liability for any loss whatsoever arising from any use of the information published herein.
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