Stock Buy call: Singtel with fair value of $3.02 by UOB Kay Hian!

Singapore Telecommunications Limited (SingTel) released its FY06 results with revenue at S$13.1bn, up 4.1% YoY, but operational EBITDA fell 4.2% YoYto S$4.5bn. Cost escalation was to blame, however, at the profit level,SingTel's results were much better at S$3.3bn, +7.7% YoY. The betterbottom-line performance was due to SingTel's regional mobile associates'sterling performances, with pre-tax contribution of S$1.56bn, up 30% YoY.Telkomsel was the most important division, contributing more than half ofthe total, with Bharti at a far second. The investment case for SingTelremains its ability to reward investors handsomely. In that respect, it ispaying out S$0.24 per share in the form of capital reduction and dividends.Finally, we have revised up our FY07F EPS to 20.7 cents and our fair value to S$3.02 on the back of the capital reduction. We maintain our BUY rating.