Absence of new entrant is M1’s only hope of reprieve

SINGAPORE (July 18): Maybank Kim Eng is keeping its “hold” recommendation on M1 with a lower target price of $2.94 from $3.09 previously, after management lowered its full-year profit guidance to “single-digit decline” from “stable” growth.

In a Monday report, analyst Gregory Yap says 2Q results for Singapore’s smallest telco were well within the research house’s expectations, but it has not been a strong quarter by any means.

From the telco’s latest earnings report, the analyst highlights flat service revenue as well as a decline in net profit and both postpaid & prepaid revenue. Fixed services remained the best performing area, but revenue growth was nonetheless outstripped by the rise in cost of providing the said service.

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