• FY14 net profits declined 2% y-y to S$371 million, but above consensus by 2.1%.
• Expect growth to be driven by mobile data monetisation and enterprise services.
• Maintain Accumulate with TP of S$4.50 on positive outlook.

What is the news?

• 4Q14 earnings up 10.2% y-y on higher EBITDA margin, due to lower traffic expenses.
• anagement guided for low single-digit growth in FY15F service revenue.
• Cash capex guided for 13% of revenue in FY15F, excluding MediaHub project payments.
• 20cts DPS to be maintained for FY15F as intended by management.

How do we view this?

While broadband revenue declined despite the increase in customer base, we think average revenue per user (ARPU) may bottom out soon as broadband price competition stabilizes. Management shared that 61% of its postpaid customers is on the 4G tiered data plans and we expect mobile data monetisation will drive growth this year.

Investment Actions

Maintain Accumulate with revised TP of S$4.50, implying 20.8x FY15e P/E. Total potential upside include 4.5% expected dividend yield.

Source: Phillip Securities Research - 26 Feb 2015