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<Research>M Stanley Expects CN Telecoms' 3Q Rev. Growth to Remains Weak, but Profitability Intact
Recommend 41 Positive 71 Negative 31 |
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CHINA TOWER (00788.HK) will release its quarterly results tomorrow (18th), followed by the big 3 Chinese telecoms next week. Morgan Stanley issued a research report expecting 3Q24 service revenue growth for China's telecommunication sector to remain weak at only 1.9% YoY hike, or about the same as 1.8% YoY increase in 2Q24. This is in line with data from the Ministry of Industry and Information Technology (MIIT), which shows that service revenues from Chinese telecoms rose 1.8% YoY in July-August, compared with a 1.6% rise in 2Q24, according to the report. By company, CHINA MOBILE (00941.HK)'s 3Q24 service revenue is expected to grow 1.5% YoY, while CHINA TELECOM (00728.HK)/ CHINA UNICOM (00762.HK) will climb 2.6%/ 2% YoY, due to a slowdown in new business-related revenue. Morgan Stanley forecasted big 3 telecoms' profitability to remain stable in 3Q24, and a 4.9%/ 6.6%/ 9.1% YoY growth in 3Q24 net profit of CHINA MOBILE/ CHINA TELECOM/ CHINA UNICOM. Morgan Stanley kept rating at Overweight for the H-shares of the big 3 telecoms, which offer attractive dividend yields ranging from 6.2-7.4% under the downcycle of capital expenditure. The broker also kept rating at Equalweight on CHINA TOWER (00788.HK), as the valuation of the company is relatively unattractive compared to other telecoms due to the growth outlook and pressure on its free cash flow. Morgan Stanley's ratings and target prices for the H-shares of the big 3 telecoms and CHINA TOWER are listed below: Stock｜ Rating｜ TP (HKD) CHINA MOBILE (00941.HK)｜Overweight｜80 CHINA TELECOM (00728.HK)｜Overweight｜5 CHINA UNICOM (00762.HK)｜Overweight｜6.5 CHINA TOWER (00788.HK)｜Equalweight｜0.9 AAStocks Financial News |
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