Z74.SI · SES · Communication Services
Singapore Telecommunications Limited
Also onConsensus Drift
Implied value per share
SGD 0.40
Market price
SGD 4.35
Implied upside
-90.9%
5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case
Current EV/EBITDA of 22.0x sits outside a defensible 3-20x band, so the exit multiple is capped at 20.0x. A multiple that far out usually means EBITDA is the wrong denominator for this business.
Value Per Share
Same forecast, different terminal treatment. Percentages vs price.
Forecast Cashflows
Reporting currency (SGD). Outflows negative.
| Line | FY27 | FY28 | FY29 | FY30 | FY31 | CAGR |
|---|---|---|---|---|---|---|
| Revenue | SGD 14.1bn | SGD 14.0bn | SGD 13.9bn | SGD 13.8bn | SGD 13.7bn | -0.8% |
| EBIT | SGD 1.1bn | SGD 1.0bn | SGD 1.0bn | SGD 1.0bn | SGD 1.0bn | -0.8% |
| NOPAT | SGD 912.9m | SGD 905.3m | SGD 897.7m | SGD 890.2m | SGD 882.8m | -0.8% |
| Add depreciation & amortisation | SGD 2.4bn | SGD 2.4bn | SGD 2.4bn | SGD 2.4bn | SGD 2.3bn | -0.8% |
| Less capital expenditure | SGD -2.9bn | SGD -2.8bn | SGD -2.8bn | SGD -2.8bn | SGD -2.8bn | -0.8% |
| Less increase in working capital | SGD 20.3m | SGD 20.2m | SGD 20.0m | SGD 19.8m | SGD 19.7m | +0.8% |
| Free cashflow to firm | SGD 499.0m | SGD 494.8m | SGD 490.7m | SGD 486.6m | SGD 482.5m | -0.8% |
| Discount factor | 0.9672 | 0.9048 | 0.8464 | 0.7918 | 0.7407 | - |
| Present value | SGD 482.6m | SGD 447.7m | SGD 415.3m | SGD 385.2m | SGD 357.4m | -7.2% |
| Present Value Of The Forecast | SGD 2.1bn | |||||
Discount Rate
Source shown per component. All overridable above.
| Risk-free rate | 4.20% | USD assumption - no free live source available for this market (assumption) |
| Equity risk premium | 6.50% | Market assumption |
| Beta | 0.497 | Reported 0.250, pulled toward 1.0 (Blume) |
| Cost of equity | 7.43% | Risk-free + beta x equity risk premium |
| Cost of debt | 4.20% | Floored at the risk-free rate (implied cost of debt was lower) |
| Market capitalisation | SGD 70.9bn | 85.9% of capital |
| Total debt | SGD 11.7bn | 14.1% of capital, book value as a proxy |
| Tax rate | 13.2% | Effective, capped at statutory |
| WACC | 6.90% | E/V x Re + D/V x Rd x (1 - t) |
Terminal Value
Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.
Perpetuity growth at 2.50%
86% of EV
- Forecast FCFF, final year
- SGD 482.5m
- Capex at depreciation, working capital in reinvestment
- SGD 1.1bn
- Less reinvestment at g/ROIC (36.2% of NOPAT)
- SGD -411.2m
- Capitalised
- SGD 723.4m
- ROIC (WACC floor)
- 6.9%
- Terminal value, undiscounted
- SGD 16.9bn
- Terminal value, discounted
- SGD 12.5bn
- Enterprise value
- SGD 14.6bn
- Less net debt
- SGD 8.0bn
- Equity value
- SGD 6.6bn
Exit at 20.0x EBITDA
96% of EV
- Terminal value, undiscounted
- SGD 67.1bn
- Terminal value, discounted
- SGD 49.7bn
- Enterprise value
- SGD 51.8bn
- Less net debt
- SGD 8.0bn
- Equity value
- SGD 43.8bn
Spread between methods: 148%.
Sensitivity
Value per share (SGD) by discount rate and long-run growth.
| Long-run growth | |||||
|---|---|---|---|---|---|
| Discount rate | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
| 4.90% | 0.79 | 0.80 | 0.80 | 0.81 | 0.82 |
| 5.90% | 0.56 | 0.56 | 0.56 | 0.57 | 0.57 |
| 6.90% | 0.39 | 0.39 | 0.40 | 0.40 | 0.40 |
| 7.90% | 0.26 | 0.27 | 0.27 | 0.27 | 0.28 |
| 8.90% | 0.17 | 0.17 | 0.17 | 0.18 | 0.18 |
Outlined: this model. Green text: above today's price of 4.35. Shading: distance from this model's own value.
Priced In
What each input would have to be to justify the current price, one at a time.
| Input | Model | Implied | Gap |
|---|---|---|---|
| Revenue growth, every year | -0.8% | 45.2% | +46.0pp |
| EBIT margin | 7.4% | 43.4% | +36.0pp |
| Discount rate | 6.9% | 2.6% | -4.3pp |
Live formulas, not pasted numbers - edit a driver and the workbook reprices.
Yahoo Finance and RBA data. General information, not advice. Methodology.