Nxera, the regional data centre arm of Singtel's Digital InfraCo unit, will be a key growth driver. Management expects data centre-related ebitda to double by FY2028, driven by increasing demand from AI-centric cloud workloads.
“We see the decent pre-sold capacity of new data centres providing a new leg of growth for Singtel’s Digital Infraco business in the mid-to-longer term,” wrote RHB analysts in a July 22 note.
Scheduled to go live in January 2026, Singtel’s 58MW Tuas data centre has already sold more than 50% of its capacity. In Thailand, Singtel’s joint venture with Gulf Energy and Advanced Info Service has pre-committed 80% of capacity ahead of its mid-2025 launch.
Meanwhile, construction of a 64MW AI-ready data centre in Johor — a joint venture with Telekom Malaysia — is on track for completion in 4QFY2026. The facility can scale up to 200MW, and early works including piling and infrastructure buildout have begun.
These regional data centres will be equipped with liquid cooling and Nvidia’s GB200 GPUs, allowing Singtel to offer AI/GPU-as-a-service, which gives customers access to advanced AI computing power without the need for costly infrastructure investment.
With 200MW of capacity expected to be operational by end of 2026 and a long-term roadmap to 400MW, Nxera’s ebitda is forecast to grow at a 29.8% CAGR between FY2026 and FY2028, contributing roughly 6% to group ebitda by FY2028.
Singtel is now eyeing Japan as its next data centre market. Supporting that, the company is part of a consortium building the Asia United Gateway East submarine cable to enhance regional network connectivity and support growing AI data traffic. The subsea cable is slated for completion by 3QFY2029.
RHB also sees capital recycling as a key upside catalyst. Singtel’s 28.3% stake in Bharti Airtel (currently valued at over $48 billion) could be gradually trimmed to align with the Mittal family’s 23% holding. This would unlock more than $8 billion, or 53 cents per share, supporting the group’s expanded $9 billion capital recycling target.
“This also portends upside to the 3 cents to 6 cents in variable realisation dividends (VRD). We see the VRD sustaining yields of around 5% from FY2026 to FY2028. A 1% sell-down in Airtel would raise 10 cents to 11 cents per share,” notes the analysts.
Singtel remains RHB’s top sector pick, backed by “improving ROIC, capital management and earnings execution as key re-rating catalysts.”
As at 10.44am, shares in Singtel are trading 1 cent lower or 0.24% down at $4.14.
