Starting from Wednesday (April 8), nearly 615,000 members holding new telecom preferential shares can withdraw cash after the sale. Over the past year, the stock price of new telecom has surged by 50%. Should members sell immediately to cash out or continue to hold for dividends?
Let’s first understand the comprehensive evaluations of this stock by analysts between February and March of this year. Lianhe Zaobao has also inquired with analysts to understand the impact of the transfer of preferential shares on the stock price and prospects of new telecom.
New telecom, which went public in 1993, is no longer a telecom company primarily focused on the Singapore market. About 80% of its business comes from outside Singapore, holding stakes in major telecom companies in Thailand, Indonesia, the Philippines, India, and Australia.
Moreover, new telecom's business is not limited to the telecom industry. It is now also involved in data centers, technology services, digital infrastructure, cloud services, and digital banking.
<h3>Steady Performance &#34;In Line with Expectations&#34; as the Main Theme</h3>
When new telecom announced its business report for the first nine months of the fiscal year 2026 on February 12, China Galaxy Securities (CGS International) pointed out that the group's core net profit reached SGD 2.097 billion, a year-on-year increase of 12%, in line with expectations. UOB Kay Hian also described new telecom's performance as &#34;strong and in line with expectations.&#34;
However, China Galaxy Securities noted that the core pre-tax profit in the Singapore market was dragged down by weak local consumer mobile business, and the strong performance of the Singapore dollar against the Australian dollar impacted pre-tax profits in Australia.
<h3>Several Brokerages Rated &#34;Buy&#34; Between February and March This Year</h3>
UOB Kay Hian: Buy, target price SGD 5.5
RHB: Buy, target price SGD 5.5
China Galaxy Securities: Add, target price SGD 5.34
Maybank: Buy, target price SGD 5.25
DBS Group: Hold, target price SGD 5.36
Analysts believe there are several driving factors.
<ol>
<li>Asset Value Release as the Core Catalyst</li>
</ol>
China Galaxy Securities stated that the asset monetization strategy that new telecom has started in recent years has provided a key catalyst for the stock price.
In recent years, new telecom has actively maximized its investment portfolio through asset recycling. In November last year, it sold 0.8% of its direct stake in the joint venture Indian mobile operator Bharti Airtel, cashing out SGD 1.5 billion and achieving a profit of SGD 1.1 billion.
According to estimates by China Galaxy Securities, for every 100 Indian Rupees increase in Bharti Airtel's stock price, it will bring about SGD 0.14 gain to new telecom's adjusted net asset value (RNAV) per share.
Based on Bharti Airtel's stock price as of February 12, assuming new telecom reduces its 27.5% stake in Bharti Airtel to align with the indirect holding level of the founding Mittal family, the company could raise about SGD 12.6 billion for new investments and shareholder returns
2) Data centers and artificial intelligence become new growth stories
Maybank emphasizes that New Telecom's investment in data center company STT GDC, along with KKR, strengthens New Telecom's value proposition in AI as a service and GPU as a service, and points out that the Asia-Pacific data center market could grow by 15% to 20% over the next five years.
<ol>
<li>Earnings still have medium-term growth potential</li>
</ol>
Maybank expects New Telecom's earnings to compound annually by 16% from the fiscal year 2025 to the fiscal year 2028.
Industrial Bank also noted that the new growth engine will drive continuous expansion of earnings.
Although most brokerages maintained a &#34;buy&#34; rating on New Telecom between February and March this year, some analysts believe that New Telecom's valuation has risen.
DBS downgraded its rating to &#34;hold&#34; on March 23.
DBS pointed out that New Telecom's stock price has already reflected positive news, with the holding company's discount narrowing to an eight-year low. The operating profit of Singapore Telecom's business may face pressure in the fiscal year 2027, thereby limiting further valuation reassessment of the core business stock price.
In addition, New Telecom's dividend yield has fallen below 4%, while the five-year average is 4.8%, which cannot support a significant rise in stock price

SGAPY

New Telecom's preferential shares will be available for cashing out starting April 8, with nearly 615,000 CPF members eligible to withdraw cash. Over the past year, New Telecom's stock price has risen by 50%. Analysts' evaluations of the stock indicate stable performance that meets expectations. New Telecom's business is no longer limited to Singapore, with approximately 80% of its business coming from overseas, covering multiple sectors including telecommunications, data centers, and technology services. Analysts have assessed the impact of the preferential share transfer on the stock price and outlook

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New Telecom's preferred shares can be cashed out starting tomorrow. How did analysts view this stock previously? | Lianhe Zaobao