What Investors Should Know About M1 Ltd’s Positive Outlook For Its Corporate Business
M1 Ltd (SGX: B2F) is an easily recognisable company in Singapore, given that it’s our island nation’s third largest operational telco.
In mid-March, M1 published its annual report for the year ending 31 December 2017. Given that reading an annual report is one of the best ways to keep up with a company’s developments, I decided to go through M1’s latest annual report to understand the company’s prospects, and how it had performed in 2017.
Generally, when reading an annual report, I will pay close attention to the letter to shareholders that the company’s chairman and/or CEO writes. In this article, I will look at an area that I found to be interesting while reading the latest shareholders’ letter: Management’s thoughts on the outlook of the company’s Corporate business.
To begin with, M1’s management shared their optimism about the Corporate and ICT business:
“Our Corporate and ICT business will continue to grow.”
This is drastically different from management’s outlook for the consumer-related business of M1.
From the quote above, it’s clear that M1’s management has significant confidence in growing the Corporate and ICT business. In fact, this business experienced a 25% increase in revenue to S$130 million in 2017. It is also the only business segment that saw revenue growth in the year.
M1’s management then went on to share details on their plans to grow the Corporate and ICT business (emphases are mine):
“We are building and acquiring competencies, and forming key partnerships with technology and solution providers, to strengthen and expand our corporate solutions, such as in areas of managed infrastructure and security solutions, Smart Nation initiatives, as well as cloud and data analytics.
From strengthening our core connectivity infrastructure, building digital and ICT capabilities, to digitalising our operations, we are on track to transform into a Smart Communications Provider and build new revenue streams that will deliver growth and long-term value for our stakeholders.”
We can see that M1 wants to provide more value added services such as managing/analysing information, rather than just transmitting information. But with its peers also heading towards the same direction, it will be interesting to see how M1 differentiates itself from the competition.