STOCKS NEWS SINGAPORE-Citi cuts M1 to neutral
Citigroup downgraded telecommunications company M1 Ltd to 'neutral' from 'buy' and lowered its target price to S$2.70 from S$2.86, citing higher capital spending over the next few years.
M1 shares were 0.4 percent higher at S$2.76, and have gained 1.8 percent since the start of the year, compared with the FTSE ST Telecommunications Index's 5 percent rise.
Citi has cut its earnings estimates for M1 by 10-11 percent for 2013-2014 to factor in higher capital expenditure (capex) expectations and an estimated S$100 million in LTE spectrum payments in 2015 and 2016.
The brokerage cited M1's management as saying it expects capex to be between S$130-S$150 million this year, higher than S$123 million last year, due to higher quality of service and increased coverage and capacity requirements.
"With the 19 percent return over the last year, we find M1's share price no longer as attractive on a relative valuation and yield basis," said Citi in a report.
In Southeast Asia, Citi prefers Thai telecommunications companies such as Advanced Info Service Pcl and Total Access Communication Pcl.
1027 (0227 GMT)
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