[ET Net News Agency, 13 August 2019] HSBC Global Research lowered its target price for
PCCW (00008) to HK$4.7 from HK$4.8 and maintained its "hold" rating.
The research house said PCCW's core EBITDA declined 4%, largely due to increased losses
at the Viu "over-the-top" business. This continues to expand into new markets, although
70% of monthly average users and revenue come from wealthier markets in Southeast Asia
such as Singapore and Thailand. Expansion costs saw EBITDA losses increase by 63% in 1H,
compared with revenue growth of 12%.
Other businesses are more stable but exposed to both secular trends such as a decline in
traditional pay-TV, and cyclical factors such as a downturn in the business cycle.
As a result, HSBC reduced its revenue estimates for PCCW by 6-7% for 2019-22. (KL)