[ET Net News Agency, 17 July 2020] Jefferies Research lowered its target price for
China Mobile (CM)(00941) to HK$67.52 from HK$72 as it no longer uses a target dividend
yield of 4.5%. It maintained its "buy" rating.
The research house said the market will likely focus on how the US DPR against Huawei
could potentially impact China's 5G rollout and thus capex. Telcos would very unlikely
discuss any "Plan B" (because it may not exist), but could continue to stress their
"rational approach" to capex.
CM would likely reiterate its guidance total capex would not "significantly" rise going
into the 5G cycle. Jefferies believes the tone will be perceived as "downbeat," even
without considering the possibility that Huawei may not be able to deliver 5G equipment
starting sometime in 2021. (KL)