M1

UOBKayhian on 17 Oct 2014

FY14F PE (x): 18.8
FY15F PE (x): 17.9
M1 reported net profit of S$44.5m for 3Q14 (+12.7% yoy), which is in line with our
expectations. Slight easing of growth for post-paid. M1’s post-paid subscriber base
contracted slightly by 1,000 on a qoq basis. The pace of expansion has eased and
management intends to intensify promotions to regain lost ground. Post-paid ARPU
eased marginally by 0.8% qoq to S$61.80 due to dilution from SurfShare plans. Our
target price for M1 is S$4.00 based on DCF (required rate of return: 6.7%, terminal
growth: 1.0%).