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SINGAPORE Company

SINGAPORE CompanyUpdate
Update Results MITA
MITANo.
No.010/06/2009
010/06/2009

12 April 2010
Maintain
MobileOne Ltd
BUY
Previous Rating: BUY Looking forward to NBN
Current Price: S$2.09
Likely decent start to 2010. M1 Ltd will kick off the reporting
Fair Value: S$2.28
season for the telcos and we expect to see a pretty decent
set of 1Q10 results on 16 Apr 2010, driven by the rapidly
recovering economy in Singapore; a MAS poll of 20 economists
3500 STI 2.4 pegs the average GDP growth forecast at 9.5% for 1Q10.
3000 2.2
2.0 Mobile subscriber numbers have also been pretty encouraging,
2500 1.8
2000
MobileOne
1.6
with total subscribers (2G+3G) up 0.1% from Dec to 6.865m
1500
1.4 in Feb, as the number of 3G subscribers continued to grow.
1.2
1000 1.0 We suspect one reason for this increase is probably due to
May-08

May-09
Aug-08

Nov-08

Aug-09

Nov-09
Feb-09

Feb-10

the ongoing demand for the Apple iPhone 3GS, which M1 had
started distributing in Dec 2009.

Outlook for mobile market remains buoyant. Although the


mobile phone penetration rate has already hit 137.6% in Feb
2010, we believe that the proliferation of mobile Internet devices
Reuters Code MONE.SI
with standalone 3G SIM cards - like the Apple iPad 3G version
ISIN Code B2F - will continue to drive growth in the mobile market. We believe
Bloomberg Code M1 SP that M1's recent capex in building up its own backhaul
Issued Capital (m) 898 capabilities will enable it to garner a bigger share of this
Mkt Cap (S$m/US$m) 1,876 / 1,350 growing mobile data market. For the overall market, industry
Major Shareholders watcher Research and Markets predicts that Singapore's
mobile subscriber base will hit 7.750m in 2014, up 13% from
SunShare 24.75%
2009.
Free Float (%) 38.9%
Daily Vol 3-mth (‘000) 986
Looking forward to NBN. Besides the still buoyant mobile
52 Wk Range 1.410 - 2.170 market, M1 is also looking towards the NBN (National
Broadband Network) initiative for growth. More specifically,
access to the previously restricted (or totally unavailable) home
and business broadband markets will offer the highest growth
opportunities for M1 and also allow the telco to become a "full
service" provider. Already we see that its move to buy over
(S$m) FY08 FY09 FY10F FY11F Qala Singapore in Sep 2009 has started to bear fruits - we
Revenue 800.6 781.6 808.5 804.4 note that M1 has already started marketing its business
EBITDA 316.5 309.7 320.4 322.8 broadband packages, with prices from as low as S$105.93/
EPS (cts) 16.8 16.8 17.3 17.5 month for a 4Mbps Dynamic ADSL.
PER (x) 12.5 12.4 12.1 12.0
P/NTA (x) 13.0 10.2 8.5 7.2 Maintain BUY with S$2.28 fair value. For the upcoming
1Q10 results, we expect M1 to post operating revenue of
S$211.9m, up 13.7% YoY (but down 2.0% QoQ) and a net
profit of S$39.8m, down 4.9% YoY (but up 7.1% QoQ). In any
case, we intend to hold off adjusting our FY10 estimates until
after the results. We also maintain our BUY rating as M1 could
potentially benefit the most when NBN kicks off from mid-
Carey Wong 2010.
(65) 6531 9808
e-mail: carey@ocbc-research.com

Please refer to the important disclosures at the back of this document.


MobileOne Ltd

Mobileone's Key Financial Data

EARNINGS FORECAST BALANCE SHEET


Year Ended 31 Dec (S$m) FY08 FY09 FY10F FY11F As of 31 Dec (S$m) FY08 FY09 FY10F FY11F

Revenue 800.6 781.6 808.5 804.4 Cash 17.8 7.4 10.9 30.9
EBITDA 316.5 309.7 320.4 322.8 Other Current Assets 92.9 133.3 133.4 132.8
Depreciation & amortisation -123.9 -128.1 -125.0 -124.9 Fixed Assets 612.9 611.4 612.8 609.2
Operating Profit 316.6 309.7 320.4 322.8 Other long term assets 80.1 85.4 79.1 72.7
Net interest -7.6 -6.5 -6.3 -7.2 Total Assets 803.7 837.5 836.1 845.6
Associates 0.0 0.0 0.0 0.0 Current Liabilities less Debt 230.5 224.7 224.4 223.9
Exceptionals 0.0 0.0 0.0 0.0 Debt 250.0 269.0 250.0 240.0
Pre-tax profit 185.1 175.1 189.1 190.7 Other Long Term Liabilities 99.9 87.7 74.5 63.4
Tax -34.9 -24.8 -34.0 -34.3 Shareholders Equity 223.2 256.1 287.1 318.4
Net Profit 150.1 150.3 155.1 156.3 Total Equity and Liabilities 803.6 837.5 836.1 845.6

CASH FLOW
Year Ended 31 Dec (S$m) FY08 FY09 FY10F FY11F KEY RATES & RATIOS FY08 FY09 FY10F FY11F

Operating Profit 317.2 310.3 320.4 322.8 EPS (S cents) 16.8 16.8 17.3 17.5
Working Capital Changes -8.4 -41.0 -6.1 -0.3 Fully Diluted EPS (S cents) 16.8 16.8 17.3 17.5
Net Cash from Operations 254.5 222.0 266.0 270.1 PER (x) 12.5 12.4 12.1 12.0
Capex -96.9 -119.0 -120.0 -115.0 Price/NTA (x) 13.0 10.2 8.5 7.2
Investing Cash flow -96.8 -131.7 -123.3 -116.0 EV/EBITDA (x) 6.6 6.9 6.6 6.4
Change in Equity 1.8 0.3 0.0 0.0 Dividend Yield (%) 6.4 6.4 6.6 6.7
Net Debt Change -35.0 19.0 -19.0 -10.0 ROIC (%) 31.7 28.6 28.9 28.0
Financing Cash Flow -163.0 -100.7 -139.2 -134.1 ROE (%) 67.2 58.7 54.0 49.1
Net Cash flow -5.3 -10.4 3.5 20.0 Net Gearing (%) 1.0 1.0 0.8 0.7
Ending Cash Balance 17.8 7.4 10.9 30.9 PE to Growth (x) (1.4) 84.0 3.8 14.8

Source: Company data, OIR estimates

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MobileOne Ltd

SHAREHOLDING DECLARATION:
The analyst/analysts who wrote this report holds NIL shares in the above security.

RATINGS AND RECOMMENDATIONS:


OCBC Investment Research’s (OIR) technical comments and recommendations are short-term and trading
oriented.
- However, OIR’s fundamental views and ratings (Buy, Hold, Sell) are medium-term calls within a 12-month
investment horizon. OIR’s Buy = More than 10% upside from the current price; Hold = Trade within +/-10%
from the current price; Sell = More than 10% downside from the current price.
- For companies with less than S$150m market capitalization, OIR’s Buy = More than 30% upside from the
current price; Hold = Trade within +/- 30% from the current price; Sell = More than 30% downside from the
current price.
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Carmen Lee
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Page 3 12 April 2010