Singtel Sells 20% Stake in S$5.5 Bil Regional Data Centre Business: Top 5 Highlights for Singapore Investors

September 18, 2023

Singtel stock earnings

Singapore’s telecommunications powerhouse, Singapore Telecommunications Limited (SGX: Z74), has unveiled a strategic partnership with global titan KKR, selling 20% of its regional data centre (RDC) segment for a substantial S$1.1 billion.

This arrangement not only places a S$5.5 billion valuation on the RDC wing but also underscores Singtel’s ambitious pursuits in pivotal Southeast Asian regions such as Singapore, Indonesia, and Thailand.

With the globe’s hunger for data growing exponentially, Singtel’s move solidifies its stature as a contender worth monitoring.

Here are five key highlights for Singapore investors.

  1. The deal establishes a strong valuation for Singtel’s data centre division.

  2. Singtel’s RDC unit reported robust earnings in Q1 2024 with S$72 million in revenue and an EBITDA of S$44 million.

  3. Singtel achieved 99% utilisation rate for its data centres in Q1 2024 and is expanding.

  4. The company plans to add another 200MW capacity, indicating higher growth potential for the RDC unit.

  5. Bloomberg data suggests a positive outlook for Singtel, with a potential rise of 27.1% in its share price.

Source: Bloomberg, ProsperUs

In conclusion, Singtel’s significant agreement with KKR emphasises its vision for rapid growth in the Southeast Asian data centre landscape. Couple this with solid earnings, optimal utilization metrics, and overwhelming analyst support, Singtel is distinctly poised for a dynamic, data-centric future.

Disclaimer: ProsperUs Head of Content & Investment Lead Billy Toh doesn’t own shares of any companies mentioned.

Billy Toh

Billy is deeply committed to making investment accessible and understandable to everyone, a principle that drives his engagement with the capital markets and his long-term investment strategies. He is currently the Head of Content & Investment Lead for Prosperus and a SGX Academy Trainer. His extensive experience spans roles as an economist at RHB Investment Bank, focusing on the Thailand and Philippines markets, and as a financial journalist at The Edge Malaysia. Additionally, his background includes valuable time spent in an asset management firm. Outside of finance, Billy enjoys meaningful conversations over coffee, keeps fit as a fitness enthusiast, and has a keen interest in technology.

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