Towards Financial Freedom
M1 - Singing the 4G Tune (Hold, TP SGD2.65)
Come 15 Sept, M1 will be the second telco in Singapore to launch 4G plans after SingTel although it is the first telco to roll out nationwide 4G coverage, both indoor and outdoor. We do not expect a price war to erupt as M1's prices and data caps are closely in line with SingTel's. The impact on ARPU should be positive in the long run as the new plans are priced at a premium to existing 3G plans. Based on our estimates however, the impact on earnings is 10%, at best. We maintain HOLD with a target price of SGD2.65 based on peer average PE of 14x earnings as we roll forward to 2013. However, the stock is attractive on its dividend yield of 5.7%, still 430 basis points ahead of the 10-year Singapore Government Bond, and is our top Singapore telco pick.
Source: Maybank Kim Eng
Source: Maybank Kim Eng
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