Company Name: M1 LIMITED
| Research House: Barclays | Price Call: HOLD | Target Price: 2.65 |
Barclays trimmed its profit forecasts for M1 by 6 to 7% for the fiscal years 2012 and 2013 after weaker than expected first quarter results by Singapore’s number three mobile phone operator.
The broker also lowered its share price target to $2.65 from $2.70 but kept its “equal weight” rating on M1’s stock.
M1, which also provides high-speed broadband home Internet, reported a 5.3% fall in first quarter net profit to $40.3 million as growth in operating expenses outpaced a rise in revenues.
Its earnings margin before interest, tax, depreciation and amortisation slipped to 40.1% in the first quarter from 42.2% a year earlier, partly due to higher mobile phone handset subsidies and spending on broadband subscriptions.
“The expectation is for margins to improve from here into the year given the stable earnings guidance on a year-on-year basis,” Barclays said in a report.
M1 shares were down 0.41% in early trade at $2.43, underperforming a relatively flat Singapore Straits Times Index.
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