M1

Phillip Securities on 17 Jan 2012


Phillip Securities Research in a Jan 17 research report says: "M1 reported a decent set of results for FY2011. Revenue increased by 8.8% y-o-y, mainly due to strong growth in handset sales. The results were marginally below our expectations of $170 million.


"Management attributed the strong handset sales to an increase in sales volume and unit selling price. International calling service revenue declined by 3%, despite a 22% increase in international retail minutes recorded. The company also announced a final dividend of 7.9 cents, translating to a full year payout ratio of 80%.


"Following the weaker than expected results and potential margin compression, we revised our earnings estimates down by 1.1-1.6% for the next 2 years and introduce FY2014E estimates. Revised target price of $2.36. DOWNGRADE TO REDUCE."