*Official* MasterLeong Thread - Part 2

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Layers

Layers

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MasterLeong said:
ok la, at least u got 55% in stocks

time in market beats timing the market... we said it many times already

2016 was really a good year to buy


even now sti at 3000 level... still fairly priced and okay to buy and hold for long term


maybe u can consider boarding other boats that have not left port?

example Starhub and comfort delgro? solid blue chips still
Click to expand...
starylhub if cut divy. 7% become 5.5%?

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Layers

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MasterLeong said:
CIMB on M1

M1 Limited
Still not cheap enough to take on the risk
■ FY17F core EPS to fall 4.5% on higher subs retention cost and rising depreciation.
■ Core EPS to fall by a total of 31% in FY17-20F, impacted by TPG’s entry.
■ Despite high capex & spectrum fees, 80% payout ratio is sustainable in FY16-18F.
■ Some risk for 700MHz in the general spectrum auction but largely manageable.
■ Maintain Hold; target price cut by 9.5% to S$1.90. Good entry point is below S$1.56.
M1’s revenue and earnings outlook in FY17F
We expect M1’s service revenue to be flat in FY17F. Mobile revenues should fall (-1.8%)
due to lower international roaming/voice usage and negative effects from last year’s simonly
plans and some downtrading activities. This will be offset by further growth in Fixed
Services (+18.2%), driven by Enterprise contracts won at end-2016. EBITDA/core EPS
could ease 1.1%/4.5% as we see higher retention cost to lock in mobile subs ahead of
TPG’s entry in mid-2018 and rising depreciation on sustained high capex.
Earnings downhill in FY18-20F
We forecast M1’s EBITDA to decline 14.8% (core EPS: -31.0%) in FY17-20F due to
TPG’s entry. We are factoring in a 10% impact on mobile ARPU (base case), on top of
the already sizeable ARPU erosion (post/prepaid: -10%/-27%) across FY15-17F due to
incumbents’ new offers launched in 2016, positioning themselves ahead of TPG’s entry.
ARPU impact: what is a realistic range?
Given the high degree of uncertainty, we have run a scenario analysis based on 5-15%
ARPU impact across FY17-20F, which we believe is a realistic range. Assuming a
5%/15% ARPU impact (bull/bear case), we forecast M1’s EBITDA falling 6.7%/22.8%
(core EPS: -16.5%/-45.4%) across the 3-year period. While a bigger impact is not
impossible, an even more aggressive price undercutting from TPG could push EBITDA
breakeven for its Singapore mobile business beyond 7 years, we estimate.
Capex to stay high; 80% payout sustainable but yields to decline
We raise our capex assumptions for FY17/18F by 7-8% to S$140m/130m, as our recent
meeting with M1 suggests continued fiber investments to drive the Enterprise Fixed
Services business growth and meet its mobile backhaul needs. Despite this, chunky
spectrum payments and competition threat, we expect M1 to maintain its 80% payout
ratio in FY16-18 as net debt/EBITDA will rise to a peak of 1.5x at end-FY18F, then ease.
Still, we see yields falling from 6.6% in FY16F to 4.4% by FY20F, in line with core EPS.
Assessing the risk from GSA
The key risk from the general spectrum auction (GSA) will be the 700MHz, as TPG
cannot bid for 900MHz, and 2500MHz is less valuable. However, this risk is partly
mitigated by the regulator’s spectrum caps, which limits TPG’s bid to a max 2x5MHz.
Our base case is M1 winning 2x15MHz for S$90m, or 50% above reserve price. If the
final price is double/triple the reserve price, the impact to our DCF-based target price is -
1.2%/-3.7%, while net debt/EBITDA will peak at a manageable 1.6x/1.8x at end-FY18.
Maintain Hold; entry point is below S$1.56
We adjust our FY16F/17F/18F EBITDA by +1.3/-3.7%/+2.3% (core EPS: +2.1%/-6.5%/
+4.4%), due to higher handset subsidies and ARPU erosion in FY17 and 6-month delay
to TPG’s launch in FY18. Including higher capex, we cut M1’s DCF-based target price
by 9.5% to S$1.90 and maintain Hold. A good entry point would be below our bear case
fair value of S$1.56 and exit point above our bull case fair value of S$2.18. Upside/
downside risks are better-/worse- than-expected impact of TPG’s entry.
Click to expand...
1.56 TP? That's omg crazy

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L'oreal Paris

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MasterLeong said:
ok la, at least u got 55% in stocks

time in market beats timing the market... we said it many times already

2016 was really a good year to buy


even now sti at 3000 level... still fairly priced and okay to buy and hold for long term


maybe u can consider boarding other boats that have not left port?

example Starhub and comfort delgro? solid blue chips still
Click to expand...

ME8U 可以buy ma?
10char5
 
MasterLeong

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foursea said:
SIA? haha.
But I personally prefer CDG over SIA. Flight industry is more sensitive to economy downturn, plus flight safety also can affect share price. Now SIA is considered 5 star safety

CDG report looks fine, I wish to see if 30xx can held up or not, before next action. I only 60% vested now
Click to expand...

SIA i mentioned before, can buy if 20% discount to book or more.. as a value play
 
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