The re-rating has happened. The sum of the parts is still the reason to hold.
Optus has turned and asset recycling is producing real cash. At about 26 times underlying earnings, the share price already credits much of that, so the case for holding rests on assets the market still values as part of a telco.
Disclosure: I hold Singtel shares at an average cost of S$2.43. At about S$4.43 the position is up roughly 82%.
Key data
| Metric | Value |
|---|---|
| Share price (early August 2026) | ~S$4.43 |
| 52-week range | S$3.67 – S$5.27 |
| Consensus target range | S$4.83 – S$5.34 |
| FY2026 revenue | S$14.26 billion (flat) |
| FY2026 underlying net profit | S$2.77 billion (+12%) |
| FY2026 reported net profit | S$5.61 billion (+40%), incl. S$2.84 billion net exceptional gains |
| P/E on underlying earnings | ~26x |
| FY2026 dividend | 18.5 cents (13.4 core + 5.1 value realisation) |
| Trailing yield (total / core only) | 4.2% / 3.0% |
| Assets recycled since April 2024 | ~S$5.8 billion of S$9 billion target |
| Share buyback programme | S$2 billion |
| FY2027 capex guidance | S$3.0 billion (S$2.5 billion in FY2026) |
Financial year ends 31 March. FY2026 = April 2025 to March 2026. Optus figures are in Australian dollars (A$).
Summary view
Almost every Singaporean household holds Singtel somewhere: through CPF, Special Discounted Shares, or a parent’s portfolio from 1993. That familiarity is probably why many holders stopped analysing it. The business underneath has changed more in the past two years than in the decade before.
I bought at S$2.43, when consensus treated Optus as a problem and the regional associate stakes as a conglomerate discount rather than as assets. That view has not aged well. Under the Singtel28 plan, return on invested capital reached its low double-digit target early, about S$5.8 billion of assets have been recycled against a S$9 billion target, and the dividend has grown for five consecutive years. I got a lot right, and some things wrong.
The problem now is price. At about 26 times underlying earnings, Singtel is not valued as a traditional telco, and anyone describing S$4.43 as a value play is stretching the definition. The re-rating has already done much of the work.
The valuation question turns on the dividend. At S$4.43 the 18.5-cent dividend yields 4.2%, but 5.1 cents of that is funded by asset sales, not earnings. The core dividend alone yields 3.0%. If the yield stays constant, the dividend has to grow about 6% a year to deliver my 10% hurdle, or about 7% a year on the core alone. Underlying profit grew 12% in FY2026. Guidance for the Singapore business in FY2027 is low-to-mid single digits.
My view is positive on the business and neutral on the price. I am not chasing it at S$4.43, and I am not selling simply because it has gone up.
Singtel28: what has changed
Three parts of the group are now contributing at the same time, which was not true for most of the past decade.
Optus turned. FY2026 revenue grew 2.1% to A$8.3 billion and EBIT grew 23.1% to A$550 million, helped by postpaid pricing, Amaysim and network-sharing revenue. Optus held back group returns for years. It now adds to them.
NCS is growing on contracted work. Revenue grew 7.4% to S$3.2 billion and EBIT grew 33.9%, or about 30% excluding a one-off subcontractor credit. The more useful number is bookings: S$3.8 billion, a book-to-bill of 1.2 times. Book-to-bill compares new contracts won with revenue billed in the period. At 1.2 times, NCS signed S$1.20 of new work for every S$1 it delivered, so the order book is growing. Subscriber counts tell you what happened. Bookings tell you what comes next.
The associates are contributing. Regional associates delivered S$2.0 billion of net profit, up 20%, led by Airtel and AIS. Telkomsel was the weak spot.
Capital recycling and the dividend
Asset recycling has moved from a strategy slide to cash, and it now funds a defined part of the dividend.
The cash is real. Singtel recycled S$3.9 billion in FY2026, largely through the Airtel stake, taking the total since April 2024 to about S$5.8 billion. A further S$3.2 billion has been identified for the next 24 months, which would complete the S$9 billion target. Underneath this sits a S$2 billion share buyback programme.
The dividend has two parts with different reliability.
- The core dividend of 13.4 cents is paid from operating earnings. At S$4.43 it yields 3.0%.
- The value realisation dividend (VRD) of 5.1 cents is funded by asset sales. Management has indicated 3–6 cents a year through FY2030. It is a return of capital with a stated end date, not a permanent yield.
That structure is useful. I know where the extra dividend comes from and roughly how long it lasts. If the core dividend holds at 13.4 cents, management’s VRD range implies a total of 16.4 to 19.4 cents, or 3.7% to 4.4% at S$4.43. That is my arithmetic, not guidance.
Infrastructure assets and RE:AI
This is where the sum-of-the-parts argument sits, and where the market still treats Singtel as a telco.
Data centres now have a price tag. In February, KKR’s consortium bought the remaining 82% of STT GDC for S$6.6 billion, implying an enterprise value of S$13.8 billion. Nxera, Singtel’s own data-centre business, and a possible data-centre REIT or dual listing could put a visible price on more of these assets.
RE:AI is small but contracted. The GPU-as-a-service business generated S$25 million of revenue from a 1MW pilot. That does not move group earnings today. FY2027 plans call for up to S$600 million of capex and up to 11MW of GB200 and GB300 capacity, and more than 80% of target capacity is already contracted. The pipeline is roughly S$600 million over three to five years at a low-teens unlevered IRR, meaning the return on the projects before any borrowing. I am not putting a meaningful value on it yet, but I would rather own the option than not.
FY2026 numbers: reported versus underlying
Reported profit overstates the year. Underlying profit is the figure to use.
| S$ billion | FY2026 | Change |
|---|---|---|
| Revenue | 14.26 | Flat |
| Reported net profit | 5.61 | +40% |
| Net exceptional items | 2.84 | – |
| Underlying net profit | 2.77 | +12% |
| Associates’ net profit | 2.0 | +20% |
The headline is mostly a one-off. Reported net profit equals underlying profit plus S$2.84 billion of net exceptional items, mainly the gain on the Airtel transactions less provisions in Australia. Group EBITDA grew 2% and operating company EBIT grew 9%. On my reading, the associates explain most of the gap between that and the 12% growth in underlying profit.
The yield spread is reasonable. At S$4.43, the 4.2% yield is roughly two percentage points above the Singapore 10-year government bond. For a company with Singtel’s balance sheet, that is a fair spread. Excluding the VRD, it is much thinner.
Valuation
Broker targets imply upside, but the sum of the parts is the better argument.
Broker views. Consensus targets range from about S$4.83 to S$5.34, roughly 9–21% above the current price. The 52-week range is S$3.67 to S$5.27. The target price is not the argument, however.
The sum of the parts. Singtel combines a business generating S$2.77 billion of underlying profit, stakes in Airtel and AIS, a data-centre platform recently valued at S$13.8 billion in enterprise value, and a further S$3.2 billion of identified asset sales. The question is how much of that value the market credits at S$4.43. That gap is the trade.
Why yield is the anchor. A P/E of 26 times underlying earnings says the stock is not cheap, but it misses value that sits outside operating earnings. The dividend captures both: it is paid from earnings and from recycled capital, which is what Singtel28 is built around. So I anchor on yield.
Risks to the view
The stock fell 9.6% after the results. The reasons were legitimate.
Upside risks
- The Optus stake sells at a good price. Singtel has confirmed talks with interested parties. A sale of around 30% at a firm price would validate the recycling strategy and set a mark for the rest.
- Data-centre value is crystallised. A Nxera listing or a data-centre REIT would put a visible price on assets the market currently values inside a telco.
- RE:AI scales on contract. With more than 80% of target capacity contracted, the 11MW build could turn a pilot into a real earnings line.
Downside risks
- Singapore keeps shrinking. Singapore telco revenue fell 3.1%, EBIT fell 4.6%, and margin fell to 21.5%. Enterprise is now more than half of Singapore telco revenue, which helps, but the consumer decline is structural.
- Softer guidance, higher spending. FY2027 Singapore EBIT growth is guided at low-to-mid single digits rather than 10%, while capex rises to S$3.0 billion from S$2.5 billion. The market noticed.
- Optus regulatory risk. ACMA has sued Optus in the Federal Court over the September 2025 triple-zero outage, alleging more than 1,000 contraventions. A fine is manageable for Singtel. Tougher licence conditions would matter more, and I have not seen enough to quantify that.
- A weak Optus sale price. If the stake sells cheaply, the market will start questioning what the remaining assets are worth.
- SDS selling. About 120,000 holders have been moving Special Discounted Shares from CPF to CDP, and some will sell. That says nothing about the business but can cap rallies. Annoying rather than dangerous.
- The multiple. At 26 times underlying earnings, there is little margin of safety. If Singtel28 execution slips, the valuation will not protect the share price.
Bottom line
Singtel is no longer a neglected telco. At S$4.43 it is a well-run one, priced accordingly.
My average cost is S$2.43, and I am up about 82%. I am holding. The business has improved, but the Singapore consumer decline, cautious FY2027 guidance and the unresolved ACMA case mean the risk has not gone away.
For adding, I anchor on yield rather than the chart. On the FY2026 dividend of 18.5 cents:
- S$4.11 (4.5% yield) gets my attention. It is about 7% below the current price.
- S$3.70 (5.0% yield) is where I would add properly. It is about 17% below the current price and roughly where the stock bottomed over the past year. On the core dividend alone it is a 3.6% yield, so even this level relies on the VRD continuing.
Things I am watching from here:
- Whether the Optus stake sale closes, and at what price.
- Asset recycling progress toward the S$9 billion target, against the S$3.2 billion already identified.
- RE:AI: commissioning of the 11MW and conversion of contracted capacity into revenue.
- Any Nxera listing or data-centre REIT.
- The outcome of the ACMA case, particularly any change to Optus’s licence conditions.
A defensive dividend with a real growth option attached. Worth holding here, and worth buying on a bad week.
Sources: Singtel FY2026 results announcement and presentation, broker research and consensus data, and press reports on the STT GDC transaction and the ACMA proceedings. Estimates marked as mine are my own calculations.
Disclaimer
This is not investment advice. The information may not be accurate. If in doubt, seek professional advice. Do your own research. The author is not responsible for any losses you may suffer from taking a position in any asset mentioned here.