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<Research>JPM Expects CN Telecoms' 3Q Earnings to Ease a Bit; CHINA TELECOM Mostly Benefited from CN Stimulus
Recommend 50 Positive 101 Negative 35 |
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Revenues from Chinese telecoms are expected to remain soft as weak macro in China weighs on consumer and corporate businesses, JP Morgan released a report stating, while earnings will slow faintly in 3Q24. The broker believed that CHINA TOWER (00788.HK)'s 3Q24 results may also be feeble, while ZTE (00763.HK) may gradually recover given last year's low base. Since September, CHINA TELECOM (00728.HK) has lagged behind the HSI by about 15%, as investors have exited defensive stocks on the back of government stimulus. JP Morgan rated CHINA TELECOM at Overweight with a target price of $5.5. The stock is most likely to benefit from China's stimulus policies, thanks to its largest cloud business in the industry, which is likely to improve if the financial situation of local governments stabilizes. Meanwhile, for investors looking for a relative safe haven in a roiling market, CHINA MOBILE (00941.HK), which was rated Overweight with a target price of $93, would be the preferred defensive play, as it offers a respectable 7% yield with a visible dividend outlook. The broker maintained a Neutral rating on CHINA TOWER and ZTE, believing that there are no material catalysts to drive these stocks in the near future. AAStocks Financial News |
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