3 biggest factors that could drag SingTel's earnings growth

Heavier capex is one.

According to Maybank Kim Eng, in the absence of strong catalysts either on the positive or negative front, it remains Neutral on SingTel, with a DCF-derived target price of SGD3.75.

Here's more:

No growth catalyst. We expect the following to depress earnings growth in 2014-15F.

Higher amortisation cost related to BPL to fully kick in by end-2014. Management has said it will aggressively acquire more content to create more differentiation in the light of the government ruling to enforce cross-carry for BPL.

Investments in start-up companies have yielded negative returns so far and with plans to invest another SGD2b within the next three years, a quick turnaround is not likely.

Heavier capex which is expected to be as high as 14% of 2014F revenue (up from 11-12% in “normal” years). SingTel expects capex to rise 25% to SGD2.5b annually on more LTE investments in Singapore and Australia.