穷小子 mentioned in the previous post that M1 is having a juicy dividend yield of 6.38%, but because of fourth telco is approaching, patience prevails, and still waiting at the sidelines. Take a quick look on the 3Q2016 results.
Key Financial Highlights
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| Operating Revenue $277.6m to $249.1m, -10.3% |
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| Cost of sales for 9 months $380.9m to $294.6m, -22.7% |
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| Net Profit after tax $44.9m to $34.4m, -23.4% |
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Cash & Cash equivalents, -62.9%
Net debt. 20.5%
Net debt/EBITDA, 24.8%
EPS, -12.0%
All these financial leverage are statistically bad.
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Enough of the current statistic facts, let's see the good side of it.
As we all have known, majority of Singapore's consumers are bounded by the traditional 2 years contracts. Hence, the customer base is one of the most important factors to estimate the future, which at least how 穷小子 think.
Key Performance
Well, at least its 2 main business pillars', mobile and fixed services, base are increasing, at least at a slow pace.
Conclusion
Based on today closed price, the yield is about 6.9%, but of course, pretty much expecting a heavy cut to the dividends. Cut by how much is the big question for a dividend stock.
The management outlook are estimating a decline in FY2016 net profit after tax to be around the year-to-date range.
Assuming there will be a drop of 16% in EPS for FY2016, and the payout policy remains at 80%, we may be having a dividend of 12.8 cents for the next FY.
穷小子 is expecting few bad news to happen which can really hurt M1's share price deeply.
- News of fourth telco
- FY2016 results
- Cut in dividend
- Finally the completion of fourth telco (depending)
Hence not intending to average down in the near future. The first step which 穷小子 will be taking would be either wait for the price to hit at least $2.00 (psychological level), or after the fourth telco decision announced. Depends on whichever earlier.
As we all have known, majority of Singapore's consumers are bounded by the traditional 2 years contracts. Hence, the customer base is one of the most important factors to estimate the future, which at least how 穷小子 think.
Key Performance
 |
| Mobile Customer base |
 |
| Mobile Market Share |
 |
| Fixed services Customer base |
Conclusion
Based on today closed price, the yield is about 6.9%, but of course, pretty much expecting a heavy cut to the dividends. Cut by how much is the big question for a dividend stock.
The management outlook are estimating a decline in FY2016 net profit after tax to be around the year-to-date range.
Assuming there will be a drop of 16% in EPS for FY2016, and the payout policy remains at 80%, we may be having a dividend of 12.8 cents for the next FY.
穷小子 is expecting few bad news to happen which can really hurt M1's share price deeply.
- News of fourth telco
- FY2016 results
- Cut in dividend
- Finally the completion of fourth telco (depending)
Hence not intending to average down in the near future. The first step which 穷小子 will be taking would be either wait for the price to hit at least $2.00 (psychological level), or after the fourth telco decision announced. Depends on whichever earlier.
Lastly, bear in mind that the worst fearful concern is that, there is still no confirmation about a fourth telco yet, there is not even a first step made by the fourth telco, but M1 profits is already dropped hard. Imagine what can this fourth telco do more hurting if it realised.
P.S. 穷小子 is not spreading fear here. M1 is about 10.9% of his total portfolio now.
P.S. 穷小子 is not spreading fear here. M1 is about 10.9% of his total portfolio now.
hahaha probably an acquisition from either Singtel or Starhub after the 4th telecom comes out......
ReplyDeleteanything can happen, but dont think will be in any near future.
DeleteThe financials are bad
ReplyDeleteDefinitely. Lets hope it will turn better in the next few years.
Delete