[ET Net News Agency, 17 October 2019] Citi Research cut its target price for China
Communications Services (CCS)(00552) to HK$6.5 from HK$7 and maintained its "buy" rating.
The research house said CCS is a 5G infrastructure supplier with visible and stable
growth. CCS will benefit from Chinese telcos' infrastructure capex during 5G.
Infrastructure capex normally accounts for 12-15% of total telecom capex, and CCS
currently has a 50% market share in this addressable market.
CCS also has non-telco business (35-40% of total revenue) and network maintenance
business (from telcos' opex) to buffer the impact from telcos' capex downcycle. Non-telco
business development and 5G should lead to faster revenue/earnings growth in the next two
years, though FY2019 margins will see pressure due to telcos' pricing pressure and
investments in non-telco business. (KL)
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00552 CHINACOMSERVICE
Nominal 
3.610 -0.030 (-0.824%) Others
17/10/2019 17:40
{I-bank focus}Citi cuts China Com Services (00552) to HK$6.5
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