Asia Pacific Equity Research 21 July 2014

Overweight

M1

MONE.SI, M1 SP Price: S$3.63

2Q14: Strong margin improvement led by lower SAC and improving data pricing

▲ Price Target: S$4.00 Previous: S$3.90

M1 kicked off Singapore telcos’ 2Q earnings season, driving solid 330bps EBITDA margin expansion. M1’s results underline the improving dynamics of the wireless industry in Singapore, as competition remains benign and data gets priced up. We also see operators getting less aggressive on handset subsidies, given high adoption levels and rising data usage. As the only listed “pure play” wireless operator, M1 is best positioned to benefit, in our view.  2Q14 in line with our estimates: M1 reported earnings growth of 9.3% YoY, in line with our estimates. Service revenues increased 1.5% YoY, led by data, though overall revenues declined 2% YoY due to lower handset sales. EBITDA margins improved 330bps, to 34.7%, aided by lower handset costs and a slight decline in ad expenses. The postpaid sub base increased to 1.15m in 2Q from 1.14m in the previous quarter, though the reported pre-paid base declined to 855K from 966K on account of a decline in multi-SIM users following recent legislation reducing the cap on the number of pre-paid SIMs per subscriber from 10 to 3. Postpaid ARPU remained steady, though pre-paid ARPU declined 12.2% YoY. Data and SMS ARPU have stabilized and remained flat.  Margin levers for Singapore wireless operations intact: SAC for Singapore telcos increased consistently through 2008-12, as operators pushed aggressively for smartphone adoption as they invested in data networks. With smartphone penetration objectives achieved and data usage per month exceeding 2GB, we see this trend reversing. Not surprisingly, SAC for M1 declined 19.3% YoY in 2Q, to S$268. Per management, shared plans (where the secondary phone does not get a subsidy) are contributing to lower SAC. As of end-2Q, 58% of subs were on tiered data bundles, with 20% exceeding the monthly data allowance.  Scope for special dividend surprise: Net debt to EBITDA in 2Q14 was 0.8x, below the stated gearing target of 1-1.5x. This leaves scope for increases in the dividend payout, in our view. M1 typically announces a special dividend at year-end and paid a special dividend of 7.1c in 4Q13, implying a total payout of 120% vs. the stated payout of 80%. We believe it could sustain a 120% payout over the next two years, which leaves scope for a positive dividend surprise.  Revise PT: We revise our FY14E-16E earnings by -3.7% to +0.8% and roll forward our PT timeframe to Jun-15. Our new PT is based on 18x Jun-16E earnings. Maintain OW. M1 (Reuters: MONE.SI, Bloomberg: M1 SP) S$ in mn, year-end Dec FY12A FY13A Revenue (S$ mn) 1,079 1,007 EBITDA (S$ mn) 300 312 EBITDA Growth (3.3%) 4.1% Recurring profit (S$ mn) 147 160 Recurring EPS (S$) 0.16 0.17 EPS growth (%) (11.0%) 8.1% DPS (S$) 0.15 0.21 EV/EBITDA (x) 11.9 11.2 P/E (x) 22.5 20.9 Dividend Yield 4.0% 5.8% FCF to mkt cap (%) 4.7% 5.4% Source: Company data, Bloomberg, J.P. Morgan estimates.

FY14E 1,003 325 4.0% 173 0.18 6.2% 0.15 10.9 19.6 4.1% 4.7%

FY15E 1,053 358 10.2% 199 0.21 15.3% 0.17 9.8 17.0 4.7% 5.7%

FY16E 1,120 393 9.7% 217 0.23 9.1% 0.19 8.8 15.6 5.1% 6.5%

Singapore Wireless Services Princy Singh

AC

(65) 6882-2746 [email protected] Bloomberg JPMA SINGH J.P. Morgan Securities Singapore Private Limited

Utkarsh Mehrotra (91-22) 6157-3369 [email protected] J.P. Morgan India Private Limited

James R. Sullivan, CFA (65) 6882-2374 [email protected] J.P. Morgan Securities Singapore Private Limited Price Performance 3.6 S$

3.4 3.2 3.0 Jul-13

Oct-13

Jan-14

Apr-14

Jul-14

MONE.SI share price (S$) FTSTI (rebased)

Abs Rel

YTD 11.0% 6.5%

1m 3.7% 2.7%

Company Data 52-week Range (S$) Market Cap (S$ mn) Market Cap ($ mn) Shares O/S (mn) Free Float(%) 3M - Avg daily vol (mn) 3M - Avg daily val ($ mn) FTSTI Exchange Rate Price (S$) Date Of Price Price Target End Date Price Target (S$)

3m 8.4% 6.7%

12m 10.3% 7.9%

3.66-3.04 3,307 2,664 911 38.2% 0.73 2.1 3314.27 1.24 3.63 21 Jul 14 30-Jun-15 4.00

See page 8 for analyst certification and important disclosures, including non-US analyst disclosures. J.P. Morgan does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. www.jpmorganmarkets.com

Asia Pacific Equity Research 21 July 2014

Princy Singh (65) 6882-2746 [email protected]

Key catalysts for the stock price:

Upside risks to our view:

Downside risks to our view:

• We expect rising data prices, lower subscriber acquisition costs and higher margin services like VoLTE to help drive margin expansion. • M1’s gearing levels are much below started target gearing levels of 11.5x net debt to EBITDA, which make us believe that M1 is likely to continue to pay out special dividends going forward.

• Potential for higher dividend payout • Positive surprises on subsidy cuts

• Potential change in competitive intensity • Aggressive pricing on fixed broadband led by smaller operators is impacting margins - if these trends were to be sustained for a prolonged period of time, it would put our estimates at risk. • Potentially aggressive content acquisition by M1 for its Pay TV operations would be viewed negatively and could be a de-rating trigger.

Key financial metrics (S$ mn) Total revenue yoy growth EBITDA yoy growth EBITDA margin yoy change Net profit Recurring profit Adj EPS (M$) DPS (M$) Capex

FY13A 1,007 -6.7% 312 4.1% 31.0% 3.22 160 160 17.40 21.00 125

FY14E 1,003 -0.4% 325 4.0% 32.4% 1.37 173 173 18.48 14.79 125

FY15E 1,053 5.0% 358 10.2% 34.0% 1.62 199 199 21.31 17.05 120

FY16E 1,120 6.4% 393 9.7% 35.0% 1.04 217 217 23.24 18.59 128

Key model assumptions

FY13A

FY14E

FY15E

FY16E

2,109 25 125

2,021 27 125

2,057 28 120

2,081 30 128

Wireless subscribers Wireless ARPU (M$) Capex (M$ mn)

Valuation and price target basis Our Jun-15 price target for M1 is based on an 18x Jun-16E P/E, a 25-30% premium to historical trading averages. We attribute the premium to historical multiples factoring in a better earnings growth profile relative to history, as well as the potential for higher dividend payouts, given low gearing levels. We also expect consensus estimates for M1 to trend upward, which would drive multiple expansion for the stock. M1 revenue breakdown (2014E) Fixed Service 7%

IDD Fixed/BB 4% NBN 5% Sale of equipment 18%

Mobile-nonvoice 31%

Mobile-voice 35%

Source: Bloomberg, Company and J.P. Morgan estimates. Source: J.P. Morgan estimates.

Sensitivity analysis Sensitivity to 5% change in Wireless revenue (S$ mn) 5% change in Equipment sales revenue (S$ mn) 1% change in EBITDA margin (%) 5% change in capex

FY14E EBITDA impact (%) 4.2% -1.5% 2.5% NM

FY14E EPS impact (%) 0.1% 0.0% 0.0% 5.3%

Source: J.P. Morgan estimates.

JPMe vs. consensus, change in estimates Recurring Income (S$ mn) FY14E JPMe old 178 JPMe new 173 % chg -3.0% Consensus 173

FY15E 202 199 -1.4% 185

Source: Bloomberg and J.P. Morgan estimates.

Figure 1: Valuation summary – Singapore telecom operators Company SingTel StarHub M1 Average

Rating Neutral Neutral Overweight

Price (S$) 3.94 4.13 3.63

Price target (S$) 3.70 4.00 4.00

Source: J.P. Morgan estimates, Bloomberg. Priced as of July 21, 2014.

2

Market cap (US$ M) 50,623 5,739 2,719

P/E (x) 2014E 2015E 16.7 15.7 20.0 19.6 19.6 17.0 18.5 17.3

EV/EBITDA (x) 2014E 2015E 14.1 14.0 10.2 9.9 10.9 9.8 11.7 11.2

P/B (x) 2014E 2.4 103.9 9.0 38.4

ROCE 2014E 11.8% 48.7% 28.6% 29.7%

ROE 2014E 14.6% 471.5% 46.2% 177.4%

Div. yld 2014E 4.1% 5.3% 4.2% 4.5%

Princy Singh (65) 6882-2746 [email protected]

Asia Pacific Equity Research 21 July 2014

Table 1: M1 2Q14 earnings summary table S$ in millions, Year-end Dec Mobile-voice Mobile-non-voice Fixed Service IDD Fixed/BB NBN Sale of equipment Total revenues QoQ YoY

2Q13A 95 67 15 21 9 37 245 0.6% 5.3%

3Q13A 94 69 16 18 10 36 242 -1.1% -5.2%

4Q13A 92 71 16 16 11 72 279 15.2% -14.7%

2013A 376 268 62 76 37 188 1,007

Cost of equipment Leased circuit Traffic expenses NBN cost of sales Other cost of sales Staff costs Marketing and promotion Others Total opex

(64) (8) (19) (5) (12) (26) (7) (27) (168)

(60) (8) (18) (6) (11) (27) (5) (29) (164)

EBITDA QoQ YoY

77 -2.7% 6.7%

EBITDA margin - service BP change QoQ BP change YoY EBITDA margin (%) - total BP change QoQ BP change YoY Depreciation Operating profits Non operating income / expenses Interest Expense Profit before tax Tax Tax Rate (%) Net income Recurring income Average shares EPS (cents) Reported EPS Recurring EPS QoQ YoY

2Q14A 90 77 17 10 14 31 240 -0.2% -2.0%

QoQ 0.6% 4.8% 8.1% -15.0% 12.1% -15.2% -0.2%

YoY -5.2% 15.7% 13.7% -51.2% 51.7% -17.5% -2.0%

-6.7%

1Q14A 90 74 16 12 12 36 240 -13.8% -1.2%

(98) (2) (17) (6) (13) (29) (7) (28) (200)

(284) (25) (70) (21) (50) (109) (25) (112) (695)

(57) (8) (15) (7) (10) (28) (6) (29) (159)

(53) (8) (14) (8) (11) (28) (5) (29) (157)

-6.7% 4.0% -7.1% 11.6% 9.5% 0.7% -3.6% 1.4% -1.5%

-17.9% 2.6% -23.5% 71.3% -6.7% 5.3% -25.4% 8.5% -6.7%

78 0.9% 10.7%

79 2.1% -2.0%

312

81 2.6% 2.9%

83 2.5% 8.3%

2.5%

8.3%

37.0% (2.48) (0.77)

37.6% 0.59 1.93

38.2% 0.57 (3.47)

38.1%

39.8% 1.61 0.29

39.8% (0.01) 2.76

31.4% (1.06) 0.42

32.1% 0.64 4.60

28.4% (3.66) 3.68

31.0% 3.22

33.8% 5.42 1.35

34.7% 0.89 3.30

(28) 48.9 0.1 (1) 48 (9) 18% 39 39

(29) 48.5 (1) 48 (8) 17% 40 40

(31) 48.1 (1) 47 (7) 14% 41 41

(115) 197.2 0.1 (5) 193 (33) 17% 160 160

(27) 54.1 0.2 (1) 53 (11) 20% 43 43

(28) 55.2 (1) 54 (10) 19% 44 44

3.3% 2.0%

0.4% 12.9%

0.0% 1.7% -1.9%

-16.7% 13.4% 19.8%

2.6% 2.6%

12.0% 12.0%

912

919

923

921

928

934

4.3 4.3 -4.4% 10.3%

4.3 4.3 0.0% 19.4%

4.4 4.4 2.3% 7.3%

17.4 17.4

4.6 4.6 4.8% 2.5%

4.7 4.7 1.9% 9.3%

2.2% 1.9%

9.3% 9.3%

4.1%

(0.58)

8.1%

Source: J.P. Morgan estimates, Company data.

3

Princy Singh (65) 6882-2746 [email protected]

Asia Pacific Equity Research 21 July 2014

Table 2: M1 estimate revisions summary table S$ in millions, Year-end Dec Revenue New Old % change Abs change

2014E

2015E

2016E

1,003 1,029 -2.6% (26)

1,053 1,087 -3.1% (34)

1,120 1,148 -2.4% (27)

EBITDA New Old % change Abs change

325 330 -1.5% (5)

358 362 -1.1% (4)

393 390 0.7% 3

EBITDA margin New Old PPS change

32.4% 32.0% 0.3%

34.0% 33.3% 0.7%

35.0% 34.0% 1.1%

EBIT New Old % change Abs change

213 218 -2.3% (5)

244 247 -1.4% (3)

265 262 1.4% 4

Net income New Old % change Abs change

173 178 -3.0% (5)

199 202 -1.4% (3)

217 214 1.4% 3

Recurring income New Old % change Abs change

173 178 -3.0% (5)

199 202 -1.4% (3)

217 214 1.5% 3

Reported EPS (S cents) New Old % change Abs change

18.5 19.2 -3.7% (0.70)

21.3 21.7 -2.0% (0.44)

23.2 23.1 0.8% 0.18

DPS (S cents) New Old % change Abs change

14.8 15.3 -3.7% (0.56)

17.0 17.4 -2.0% (0.35)

18.6 18.4 0.8% 0.15

Source: J.P. Morgan estimates.

4

Princy Singh (65) 6882-2746 [email protected]

Asia Pacific Equity Research 21 July 2014

Investment Thesis, Valuation and Risks M1 (Overweight; Price Target: S$4.00) Investment Thesis Our overweight rating on M1 is predicated on our view that wireless telecom industry dynamics are conducive to improving profitability for incumbents. We expect rising data prices, lower subscriber acquisition costs and high-margin services such as VoLTE to help drive margin expansion. We also note that M1’s gearing levels are much below target gearing of 1-1.5x net debt to EBITDA, which make us believe that M1 will continue to pay out special dividends. Valuation Our Jun-15 price target for M1 of S$4.00 is based on an 18x Jun-16E P/E, a 25-30% premium to the historical trading average. The premium reflects a better earnings growth profile than in the past, as well as the potential for a higher dividend payout, given low gearing levels. We also expect consensus estimates for M1 to trend upward, driving multiple expansion for the stock. Risks to Rating and Price Target Our view on M1 is predicated on declining SAC trends; however, any change in competitive intensity could put this assertion at risk. We also note aggressive pricing on fixed broadband led by smaller operators impacting margins – if this trend were to continue for a prolonged period of time, it would put our estimates at risk. Finally, any aggressive content acquisition by M1 for its Pay TV operations would be viewed negatively and could be a de-rating trigger.

5

Asia Pacific Equity Research 21 July 2014

Princy Singh (65) 6882-2746 [email protected]

M1: Summary of Financials Income Statement S$ in millions, year end Dec Revenue EBITDA Depreciation & Amortization EBIT Interest expense Other Income Profit before tax Tax Minorities Net profit - reported Net profit - adjusted Shares Outstanding (mn) EPS (S$) (reported) DPS (S$) DPS payout ratio

FY12 FY13 1,079 1,007 300 312 (108) (115) 192 197 (6) (5) (3) 0 183 193 (37) (33) 147 160 147 160 910 921 0.16 0.17 0.15 0.21 90.9% 120.7%

Revenue growth EBITDA growth Net profit growth EPS growth DPS growth

1.2% (3.3%) (10.7%) (11.0%) 1.0%

(6.7%) 4.1% 9.4% 8.1% 43.4%

Ratio Analysis %, year end Dec EBITDA margin FCF margin ROE ROC ROA

FY12 27.8% 14.5% 43.7% 24.6% 15.0%

FY13 31.0% 17.9% 43.1% 25.9% 16.3%

Tax rate 20.1% 16.9% Capex to sales 11.4% 12.4% Debt/Capital 42.8% 33.1% Net debt or (cash) to equity 74.8% 49.5% Interest coverage (x) 54.5 69.4 Source: Company reports and J.P. Morgan estimates.

6

Balance sheet FY14E FY15E FY16E S$ in millions, year end Dec 1,003 1,053 1,120 Cash and cash equivalents 325 358 393 Accounts receivable (112) (114) (127) Others 213 244 265 Total current assets (4) (4) (4) 0 0 0 ST loans 209 240 262 Accounts Payables (37) (41) (44) Others current liabilities - Total current liabilities 173 199 217 173 199 217 Net working capital 934 934 934 Net fixed assets 0.18 0.21 0.23 Net Goodwill 0.15 0.17 0.19 Net Intangibles 80.0% 80.0% 80.0% Others non current assets Total non-current assets (0.4%) 5.0% 6.4% 4.0% 10.2% 9.7% Total Assets 7.7% 15.3% 9.1% 6.2% 15.3% 9.1% Long-term debt (29.6%) 15.3% 9.1% Other liabilities Total Liabilities Shareholders' equity Total liabilities and equity Net debt/(cash) Cash flow statement FY14E FY15E FY16E S$ in millions, year end Dec 32.4% 34.0% 35.0% Cash flow from operations 15.8% 18.4% 19.6% Capex 45.0% 49.9% 48.3% Cash flow from other investing 27.7% 31.2% 31.5% Cash flow from financing 17.7% 20.2% 20.8% Change in cash for year 17.5% 17.0% 17.0% 12.4% 11.4% 11.4% Beginning cash 38.7% 31.2% 23.1% Ending cash 63.0% 45.4% 30.0% 75.3 83.0 91.1

FY12 FY13 FY14E FY15E FY16E 12 55 15 57 108 180 145 144 151 161 55 50 50 50 50 246 249 209 259 319 272 188 65 524

0 181 54 235

0 177 53 230

0 181 54 235

0 190 55 245

(8) 630 13 86 0 729

(36) 649 14 74 0 737

(32) 674 14 62 0 750

(30) 693 14 50 0 757

(29) 705 14 38 0 758

975

986

959

1,015

1,076

0 103 627 348 975 260

250 107 591 395 987 196

250 107 586 373 959 235

250 107 591 424 1,016 193

250 107 601 475 1,077 142

FY12 FY13 FY14E FY15E FY16E 275 302 280 311 344 (123) (125) (125) (120) (128) 1 3 0 0 0 (154) (137) (195) (148) (166) (0)

43

(39)

42

50

12 12

12 54

54 15

15 57

57 108

Asia Pacific Equity Research 21 July 2014

Princy Singh (65) 6882-2746 [email protected]

JPM Q-Profile M1 Limited (SINGAPORE / Telecommunication Services) As Of: 18-Jul-2014

[email protected]

Local Share Price

Current:

3.59

4.00

12 Mth Forward EPS

Current:

0.20

0.25

3.50 0.20

3.00 2.50

0.15

2.00 1.50

0.10

1.00 0.05

0.50

16%

12Mth fwd EY

Current:

Singapore BY

Implied Value Of Growth*

Current:

Jan/14

Jun/13

Apr/12

Nov/12

Sep/11

Jul/10

Feb/11

Dec/09

Oct/08

May/09

Mar/08

Jan/07

Aug/07

Jun/06

Apr/05

Nov/05

Sep/04

Jul/03

Feb/04

Dec/02

Oct/01

May/02

Mar/01

Jan/00

Jun/99

5%

Aug/00

0.00

Jan/14

Jun/13

Apr/12

Nov/12

Sep/11

Jul/10

Earnings Yield (& local bond Yield)

Feb/11

Dec/09

Oct/08

May/09

Mar/08

Jan/07

Aug/07

Jun/06

Apr/05

Nov/05

Sep/04

Jul/03

Feb/04

Dec/02

Oct/01

May/02

Mar/01

Jan/00

Aug/00

Jun/99

0.00

18.69%

0.40

Proxy

14%

0.20

12% 10%

0.00

8%

-0.20

6%

-0.40

4%

-0.60

PE (1Yr Forward)

Current:

18.4x

20.0x

Price/Book Value

Jan/14

Jun/13

Nov/12

Apr/12

Sep/11

Feb/11

Jul/10

Dec/09

Oct/08

May/09

Mar/08

Jan/07

Aug/07

Jun/06

Apr/05

Nov/05

Sep/04

Feb/04

Jul/03

Dec/02

May/02

Oct/01

Mar/01

Aug/00

-0.80 Jan/00

Jan/14

Jun/13

Nov/12

Apr/12

Sep/11

Feb/11

Jul/10

Dec/09

May/09

Oct/08

Mar/08

Aug/07

Jan/07

Jun/06

Nov/05

Apr/05

Sep/04

Feb/04

Jul/03

Dec/02

May/02

Oct/01

Mar/01

Aug/00

Jan/00

Jun/99

0%

Jun/99

2%

Current:

12.0x

PBV hist

7.5x

PBV Forward

18.0x 10.0x

16.0x 14.0x

8.0x

12.0x 10.0x

6.0x

8.0x 4.0x

6.0x 4.0x

2.0x

ROE (Trailing)

Current:

38.38

60.00

Dividend Yield (Trailing)

Current:

Jan/14

Jun/13

Nov/12

Apr/12

Sep/11

Feb/11

Jul/10

Dec/09

May/09

Oct/08

Mar/08

Aug/07

Jan/07

Jun/06

Nov/05

Apr/05

Sep/04

Feb/04

Jul/03

Dec/02

May/02

Oct/01

Mar/01

Aug/00

0.0x Jan/00

Jan/14

Jun/13

Nov/12

Apr/12

Sep/11

Feb/11

Jul/10

Dec/09

May/09

Oct/08

Mar/08

Aug/07

Jan/07

Jun/06

Nov/05

Apr/05

Sep/04

Feb/04

Jul/03

Dec/02

May/02

Oct/01

Mar/01

Aug/00

Jan/00

Jun/99

0.0x

Jun/99

2.0x

3.96

16.0 14.0

50.00

12.0 40.00

10.0 8.0

30.00

6.0

20.00

4.0 10.00

2.0 Jan/14

Jun/13

Nov/12

Apr/12

Sep/11

Feb/11

Jul/10

Dec/09

May/09

Oct/08

Mar/08

Aug/07

Jan/07

Jun/06

Nov/05

Apr/05

Sep/04

Feb/04

Jul/03

Dec/02

May/02

Oct/01

Mar/01

Aug/00

Jan/00

Jan/14

Jun/13

Nov/12

Apr/12

Sep/11

Feb/11

Jul/10

Dec/09

May/09

Oct/08

Mar/08

Aug/07

Jan/07

Jun/06

Apr/05

Nov/05

Sep/04

Feb/04

Jul/03

Dec/02

May/02

Oct/01

Mar/01

Aug/00

Jan/00

Jun/99

Jun/99

0.0

0.00

Summary M1 Limited SINGAPORE Telecommunication Services 12mth Forward PE P/BV (Trailing) Dividend Yield (Trailing) ROE (Trailing) Implied Value of Growth

2682.34 1.988478 SEDOL B04KJ97 Wireless Telecommunication Ser Latest Min Max 7.17 18.36 18.36x 3.01 10.75 7.45x 3.90 13.75 3.96 30.90 50.00 38.38 -0.64 0.29 18.7%

Source: Bloomberg, Reuters Global Fundamentals, IBES CONSENSUS, J.P. Morgan Calcs

Median 12.09 6.70 6.06 43.12 -0.05

Average 12.34 6.39 6.82 42.26 -0.06

2 S.D.+ 17.01 9.78 11.46 56.84 0.24

2 S.D. 7.67 3.00 2.19 27.67 -0.35

% to Min -61% -60% -2% -20% -442%

As Of: Local Price: EPS: % to Max % to Med 0% -34% 44% -10% 247% 53% 30% 12% 55% -125%

18-Jul-14 3.59 0.20 % to Avg -33% -14% 72% 10% -130%

* Implied Value Of Growth = (1 - EY/Cost of equity) where cost of equity =Bond Yield + 5.0% (ERP)

7

Asia Pacific Equity Research 21 July 2014

Princy Singh (65) 6882-2746 [email protected]

Analyst Certification: The research analyst(s) denoted by an “AC” on the cover of this report certifies (or, where multiple research analysts are primarily responsible for this report, the research analyst denoted by an “AC” on the cover or within the document individually certifies, with respect to each security or issuer that the research analyst covers in this research) that: (1) all of the views expressed in this report accurately reflect his or her personal views about any and all of the subject securities or issuers; and (2) no part of any of the research analyst's compensation was, is, or will be directly or indirectly related to the specific recommendations or views expressed by the research analyst(s) in this report. For all Korea-based research analysts listed on the front cover, they also certify, as per KOFIA requirements, that their analysis was made in good faith and that the views reflect their own opinion, without undue influence or intervention.

Important Disclosures Company-Specific Disclosures: Important disclosures, including price charts, are available for compendium reports and all J.P. Morgan– covered companies by visiting https://jpmm.com/research/disclosures, calling 1-800-477-0406, or e-mailing [email protected] with your request. J.P. Morgan’s Strategy, Technical, and Quantitative Research teams may screen companies not covered by J.P. Morgan. For important disclosures for these companies, please call 1-800-477-0406 or e-mail [email protected]. M1 (MONE.SI, M1 SP) Price Chart 6

4

N

N S$2.5N S$2.4 N S$2.5

N S$2.91 OW S$4OW S$3.9

Price(S$)

2

Date

Rating Share Price Price Target (S$) (S$)

09-Oct-08

N

1.91

--

21-Oct-11

N

2.48

2.50

05-Apr-12

N

2.55

2.40

16-Jul-12

N

2.61

2.50

12-Jun-13

N

3.03

2.91

15-Oct-13

OW

3.46

4.00

14-Apr-14

OW

3.27

3.90

0 Aug 08

May 09

Feb 10

Nov 10

Aug 11

May 12

Feb 13

Nov 13

Aug 14

Source: Bloomberg and J.P. Morgan; price data adjusted for stock splits and dividends. Break in coverage Oct 09, 2008 - Oct 21, 2011.

The chart(s) show J.P. Morgan's continuing coverage of the stocks; the current analysts may or may not have covered it over the entire period. J.P. Morgan ratings or designations: OW = Overweight, N= Neutral, UW = Underweight, NR = Not Rated Explanation of Equity Research Ratings, Designations and Analyst(s) Coverage Universe: J.P. Morgan uses the following rating system: Overweight [Over the next six to twelve months, we expect this stock will outperform the average total return of the stocks in the analyst’s (or the analyst’s team’s) coverage universe.] Neutral [Over the next six to twelve months, we expect this stock will perform in line with the average total return of the stocks in the analyst’s (or the analyst’s team’s) coverage universe.] Underweight [Over the next six to twelve months, we expect this stock will underperform the average total return of the stocks in the analyst’s (or the analyst’s team’s) coverage universe.] Not Rated (NR): J.P. Morgan has removed the rating and, if applicable, the price target, for this stock because of either a lack of a sufficient fundamental basis or for legal, regulatory or policy reasons. The previous rating and, if applicable, the price target, no longer should be relied upon. An NR designation is not a recommendation or a rating. In our Asia (ex-Australia) and U.K. small- and mid-cap equity research, each stock’s expected total return is compared to the expected total return of a benchmark country market index, not to those analysts’ coverage universe. If it does not appear in the Important Disclosures section of this report, the certifying analyst’s coverage universe can be found on J.P. Morgan’s research website, www.jpmorganmarkets.com. Coverage Universe: Singh, Princy: AXIATA Group Berhad (AXIA.KL), Advanced Info Services (ADVA.BK), Astro Malaysia Holdings Bhd (ASTR.KL), Digi (DSOM.KL), Erajaya Swasembada Tbk PT (ERAA.JK), Globe Telecom (GLO.PS), Jollibee Foods Corp. (JFC.PS), Kalbe Farma (KLBF.JK), M1 (MONE.SI), MNC Sky Vision tbk (MSKY.JK), Matahari Department Store (LPPF.JK), Maxis Berhad (MXSC.KL), PT Ace Hardware Indonesia, Tbk (ACES.JK), PT Global Mediacom Tbk (BMTR.JK), PT Indosat Tbk (ISAT.JK), 8

Princy Singh (65) 6882-2746 [email protected]

Asia Pacific Equity Research 21 July 2014

PT Media Nusantara Citra Tbk (MNCN.JK), PT Mitra Adiperkasa, Tbk (MAPI.JK), PT Ramayana Lestari Sentosa, Tbk (RALS.JK), PT Sarana Menara Nusantara Tbk (TOWR.JK), PT Telekomunikasi Indonesia Tbk (TLKM.JK), PT Tower Bersama Infrastructure Tbk (TBIG.JK), PT XL Axiata Tbk (EXCL.JK), Philippine Long Distance Telephone Company (TEL.PS), Puregold Price Club (PGOLD.PS), Robinsons Retail Holdings (RRHI.PS), Sheng Siong Group (SHEN.SI), Singapore Press Holdings (SPRM.SI), Singapore Telecom (STEL.SI), StarHub (STAR.SI), Telekom Malaysia (TLMM.KL), Total Access Communication (DTAC.BK), Unilever Indonesia Tbk (UNVR.JK), Universal Robina Corp (URC.PS) J.P. Morgan Equity Research Ratings Distribution, as of June 30, 2014

J.P. Morgan Global Equity Research Coverage IB clients* JPMS Equity Research Coverage IB clients*

Overweight (buy) 45% 55% 46% 75%

Neutral (hold) 43% 49% 47% 66%

Underweight (sell) 11% 34% 7% 54%

*Percentage of investment banking clients in each rating category. For purposes only of FINRA/NYSE ratings distribution rules, our Overweight rating falls into a buy rating category; our Neutral rating falls into a hold rating category; and our Underweight rating falls into a sell rating category. Please note that stocks with an NR designation are not included in the table above.

Equity Valuation and Risks: For valuation methodology and risks associated with covered companies or price targets for covered companies, please see the most recent company-specific research report at http://www.jpmorganmarkets.com, contact the primary analyst or your J.P. Morgan representative, or email [email protected]. Equity Analysts' Compensation: The equity research analysts responsible for the preparation of this report receive compensation based upon various factors, including the quality and accuracy of research, client feedback, competitive factors, and overall firm revenues. Registration of non-US Analysts: Unless otherwise noted, the non-US analysts listed on the front of this report are employees of non-US affiliates of JPMS, are not registered/qualified as research analysts under NASD/NYSE rules, may not be associated persons of JPMS, and may not be subject to FINRA Rule 2711 and NYSE Rule 472 restrictions on communications with covered companies, public appearances, and trading securities held by a research analyst account.

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Princy Singh (65) 6882-2746 [email protected]

Asia Pacific Equity Research 21 July 2014

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Morgan) do not warrant its completeness or accuracy except with respect to any disclosures relative to JPMS and/or its affiliates and the analyst's involvement with the issuer that is the subject of the research. All pricing is as of the close of market for the securities discussed, unless otherwise stated. Opinions and estimates constitute our judgment as of the date of this material and are subject to change without notice. Past performance is not indicative of future results. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The opinions and recommendations herein do not take into account individual client circumstances, objectives, or needs and are not 10

Princy Singh (65) 6882-2746 [email protected]

Asia Pacific Equity Research 21 July 2014

intended as recommendations of particular securities, financial instruments or strategies to particular clients. The recipient of this report must make its own independent decisions regarding any securities or financial instruments mentioned herein. JPMS distributes in the U.S. research published by non-U.S. affiliates and accepts responsibility for its contents. Periodic updates may be provided on companies/industries based on company specific developments or announcements, market conditions or any other publicly available information. Clients should contact analysts and execute transactions through a J.P. Morgan subsidiary or affiliate in their home jurisdiction unless governing law permits otherwise. "Other Disclosures" last revised June 21, 2014.

Copyright 2014 JPMorgan Chase & Co. All rights reserved. This report or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. #$J&098$#*P

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