More on Singtel - Collaboration with AliBaba

This is a follow-up post to my Singtel post from last month. I decided to park some cash in Singtel after their results came out on May 18. As expected, there was an overall drop in net earnings and group revenue - overall group revenue dipped 1.5% from the previous year, down to S$ 16.71 billion. Net profit dipped only slightly in comparison, down 0.5% to S$ 3.85 billion. Share prices dipped slightly in the following week, but stayed above 3.70, and eventually recovered past 3.80 at one point. 

Source: Google Finance

I re-invested with an eye towards data and technological development, mainly the Netlink Trust IPO, which should result in an upwards movement in stock price for Singtel, as well as a warchest for expansion due to divestment of Netlink Trust holdings. Singtel has announced that they are making good progress, and hope to proceed with the IPO this financial year. 

There are further developments in that field - on June 19, Singtel announced a collaboration with the AliBaba Group. The e-commerce giant owns AliBaba Cloud, the leading cloud services provider in China. Singtel's Cloud Access service will connect to AliBaba Cloud, allowing enterprises in Singapore and China access to a more secure and far-reaching cloud infrastructure. 

Source: Capacity Media - The GM of Alibaba Cloud Global comments on the partnership.

This is a good step forward - as fintech corporations rise and connectivity becomes more important for SMEs both domestic and international, access to public cloud providers like Amazon and Microsoft becomes more important. AliBaba Cloud is Singtel's latest partner in this endeavour. I am glad to see more updates on this front - companies need to look towards the future when they develop/expand. Business with China is inevitable - Singtel has made a good move here. Additionally, Singtel faces increased competition both locally and internationally, as explained in my previous article. Their investments and holdings in India and Australia have come under attack by fierce competition. Locally, they have the new telecom to contend with. As such, it is refreshing to see the Group pursue development outside of their main business.  Out of all the telecommunication stocks listed on the SGX, I am the most optimistic on Singtel, with decent diversification to hedge against unforeseen circumstances.

Singtel closed at 3.80 on Monday (19th June 2017). The next round of dividends is expected to be paid in August.

Until next time.


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