Maybank Kim Eng and UOB Kay Hian are keeping their “sell” calls on M1 Limited, further lowering their target prices from $2.04 to $1.90 and from $2 to $1.76 respectively – while CIMB maintains its “hold” recommendation on the stock with a lower price target of $2.55 from $2.80 previously.
This comes after the mobile operator yesterday posted a hefty 23.4% decline in 3Q earnings, which came in below the expectations of all three research houses.
Maybank analyst Gregory Yap says the biggest concern regarding M1’s 3Q financial results was its much sharper y-o-y fall of postpaid revenue of 6%, versus 1-2% in the past few quarters – even before the appearance of a fourth mobile entrant.
“Spectrum prices, if chased up by the new entrant(s), could stretch M1’s balance sheet further,” explains the analyst, noting that the telco’s net debt/EBITDA of 1.2x ......