M1 (B2F.SG) +0.9% at S$2.26, outperforms vs peers with SingTel (Z74.SG) flat at $3.07, StarHub (CC3.SG) off 0.4% at $2.61, says Dow Jones. 

Interest in M1 likely due to expectations for good 3Q earnings, due after market close, also on belief Singapore's smallest telco has most to gain from rollout of Next Generation National Broadband Network (NGNBN). 

 

CIMB says net profits should rise at M1, Starhub, probably fall at SingTel; retains Underweight telco sector “as we remain perturbed by potential margin and pricing pressure from NGNBN, pressure on fixed broadband ARPUs and rising content costs.” 

 

Says M1, rated Outperform, remains top pick, raises target to $2.70 vs $2.60; tips core net profit of $42 million-$43 million, up 3.0%-6.0% on quarter, up 24%-27% on-year; “growth is expected to come from revenue growth of 2.0%-3.0% on quarter and 21%-22% on-year on rising data usage from growing smartphone usage, better roaming revenue from soaring inbound visitors, higher voice usage and growth in wireless broadband.” 

 

Keeps Underperform rating on StarHub, ups target to $2.24 vs $2.14. Keeps Singtel at Underperform, $3.09 target.