M1

M1: Operating revenue at $261.4m +20.9%yoy +6.4%qoq generally beat expectations. Though net profit at $39.5m +15.5%yoy, +5.3%qoq was positive, EBITDA at $77.4m was a 2.4% decrease yoy and -2.3%qoq and FY10 EBITDA margins slipped 7.6%yoy mainly due to handset sales attributed to smartphone segment. The dividend of 3.5c resulted in a better than expected FY10 payment of 17.5c share, a 7% implied yield, co expects to maintain 80% minimum payout policy beyond GY10…

ARPU was up for post-paid at $65.0 +6.2%yoy and 1.5%qoq and data plan $22.0, +2.4%yoy, +1.7%qoq. However, prepaid segment fell slightly in both market share 0.2% pt decrease and ARPU -2.1% for both yoy and qoq. Guidance for capex was $100m aimed at 4G network upgrade and setting up operating co for wholesale of NBN…

Houses reporting on M1 results maintaining Overweight/Buy ratings are MS (TP $3.00), Nomura (TP $2.95), Citi (TP $2.64), Daiwa upgrades TP $2.67 from $2.57 due to healthy 7.2% dividend for 2011. Both Deutsche (TP $2.00) and HSBC (TP $2.47) maintain Neutral ratings. CS downgrades to Neutral from Outperform, citing disappointing dividends though believing M1 is largest potential beneficiary.