CIMB Research | Oct 17 |
M1's 9M 2014 core net profit was in line at 75 per cent of our and 76 per cent of consensus full-year estimates. Q3 2014 was largely steady q-o-q but Ebitda improved y-o-y due to higher margins. Our earnings forecasts are largely unchanged, hence we keep our DCF (discounted cash flow)-based target price. M1 should benefit from average S$2 price hike across its plans (announced in September), excess data usage revenues as subscribers transit to tiered pricing plans and expansion into fixed services.
We upgrade M1 back to "add" after a 10 per cent correction in its share price from its late-July peak. M1 is trading at reasonable FY2015 EV/Ebitda of 9.8x...