M1 (B2F.SG) down 2.4% at $2.44 with investors likely taking profit after the telco posted its 4Q results Wednesday, with the stock up 11.4% since the start of October, outperforming peers on the view it will benefit most from Singapore’s NBN rollout.

OCBC, that has a Buy rating, and tweaks fair value to $2.79 from $2.70 on M1’s lower capex guidance, says the results were “almost spot on our expectations.” 

Revenue climbed 20.9% on-year, 6.4% on-quarter to $261.4 million, just 1.1% above its forecast, "buoyed by the continued good take-up for smartphones."

 

Net profit came in at $37.5 million, +0.8% on-year but off 4.8% on-quarter, 1.1% shy of house’s estimate, due to higher subsidies for smartphones, higher year-end promotional activities. 

It adds, M1 is guiding for earnings growth in 2011, “fixed network services tend to come with lower profit margins.” Thus it cuts FY11 earnings estimate by 2.0% after bumping up revenue forecast by 3.4%, and continues to like M1 for "its defensive earnings and attractive dividend yield." $2.40 is a likely support.