M1 announces their set of results 2 days ago. The summary of my take on the results is as follows:
- Revenue was lower, net profit slightly higher
- Overall operating cash flow position much better than corresponding year
- Capital Expenditure was much higher due to spending $20 mil on spectrum purchase
- Short term debts higher as well
- ARPU per quarter for post-paid and pre-paid are all down
- International Call, a big revenue contributor was down as well
M1 for me is the biggest loser among the local telecom for this move to data messaging.
Just to share an experience, we recently got some staff temporary deployed overseas and a purchase of pre-paid cut that have unlimited data access for the finite number of days was a boon for discussion across data messaging applications like Whatsapp. Gone are the days where we will be at the mercy of IDD rates and worrying about the cost of overseas communication.
With this move to data messaging and VOIP, M1 I think is a big loser here.
Share price have climbed a fair bit. This provides a base 6-7% yield. Would I buy it at this price? The price tends to be stable and if dividend season arrives I may choose to do that.
However, I will look to see any catalyst for profit growth and in a competitive telecom industry I just don’t see it currently.
This is a low volatile stock. This provides a recurring cash flow.
This is a dividend season buy. This stock have run up abit and still remains fair value to pricey.
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thirt13n
Tuesday 25th of October 2011
"M1 for me is the biggest loser among the local telecom for this move to data messaging."
Hi Drizzt, I have been following your blog for quite some time. Would like to ask what do you mean by M1's move to data messaging? and what makes it a biggest loser compared to starhub or singtel? What did M1 do differently this time?
Hope you will be able to clarify my queries. Thank you so much! :)
Drizzt
Wednesday 26th of October 2011
Hi thirt13n, take a look at how much international calls goes to the bottom line for M1 compare to the other 2 telcos. International calls disruption with 3G and data messaging and voip is a problem
Alan
Thursday 20th of October 2011
Hi, i am a stock newbie. You mentioned that M1 is a dividend season buy. Can help elaborate? When do i know when to buy this stock & earn dividends? Are there similar stocks like such out there?
Grateful if you can help enlighten me pls. Thanks! :)
Drizzt
Friday 21st of October 2011
Hi Alan, when i say its a dividend season buy it is usually at the quarters when it is likely M1 will declare dividends. Go to www.sgx.com's corporate actions and you are likely to find out which quarter M1 will declare dividends.
I usually see if the price does show weakness. If they do then i may choose to get in. Most of the time i do not.