Monday, April 18, 2011

M1 rated 'buy' by Nomura

Stock Name: M1
Company Name: M1 LIMITED
Research House: Nomura

Nomura Research in an Apr 15 research report says: "1Q11 results from M1 were solid, with revenue and net profit after tax (NPAT) 1-9% higher than our and Street estimates. Revenue was 1-2% ahead of our and consensus estimates, while EBITDA was 3% lower and NPAT 409% higher.

"Margins held steady at 42%, while, in a seasonally slow quarter, post-paid APRUs fell slightly. M1 disclosed its NBN customers for the first time-currently at 5-6k, and the majority are at low-end ARPU-but this remains a source of upside, we believe. Management continues to "expect NPAT to grow", with $100 million capex and dividend to be 80% of earnings.

"Target price of $2.95. Risks to our investment view include (1) more aggressive competition in Singapore; (2) limited ability to offer fixed-mobile bundles; and (3) a macro slowdown in Singapore. MAINTAIN BUY."

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