M1 (M1 SP) : BUY
Market Cap: US$1,919 million I Three-month average daily val: US$2.8 million
Last Traded Price: S$2.78 Price Target: S$3.30 (19% upside)

Non-cash items hurt bottom line, solid cash generation
&bull Second quarter 2016 net profit of S$ 41 million (-13% y-o-y, -7% q-o-q) was 3% below our expectations dividend of 7 Singapore cents (flat % y-o-y) for the first half of 2016 was in line
&bull Adverse impact is non-cash in nature due to Fair Value accounting for iPhone sales excluding this issue, net profit would have been up 15% y-o-y
&bull Management revised down the net profit guidance from stable to a single digit decline
&bull Maintain Buy with unchanged target price of S$ 3.30

May Bank

says prefers StarHub for stronger corporate traction and Singtel for diversification, with price targets of $4.15 and $4.50 respectively.