M1

M1: M1 has completed the upgrade of its 4G network to NTE-A in Dec 14, doubling download speed to 300Mbps using carrier aggregation. On the fibre broadband segment, M1 has garnered a subscriber base of 108,000 representing a market share of 14.2% for fibre broadband. 90% of M1’s fibre broadband subscribers also use M1 for mobile services and M1 has managed to bundle multiple services since it launched fibre broadband services on 1 Sep 10. It has recently launched the fastest fibre broadband service at 10Gbps aimed at enterprise customers, such as data centres, financial institutions and cloud service providers.

M1 has also refreshed and renovated its 14 M1 shops with a new store layout based on counter-less concept, coupled with user-friendly self-service registration and bill payment kiosks.

UOB Kay Hian notes that M1 remains susceptible to regulatory risks in SG, with mobile accounting for 81.5% of its service revenue in 1Q15. Nevertheless they are no longer bearish after share price corrected 18% post announcement of its 1Q15 results. Share price catalysts includes growth from mobile business, augmented by expansion in fibre broadband and capital management through special dividend provides positive surprises. Lastly, IDA is expected to announce its assessment of the submissions to its industry consultation and the framework for the upcoming spectrum auction. The house upgrades its rating to HOLD and TP of $3.60, based on DCF (required rate of return: 7.2%, terminal growth 1.0%). Entry price is $3.10.