[ET Net News Agency, 11 December 2018] Credit Suisse raised its target price for China
Tower Corporation (CTC)(00788) to HK$1.83 from HK$1.78 and maintained its "outperform"
rating.
The research house said cited CTC CFO Gao Chunlei on a reverse roadshow in Guangzhou
outlining a picture of strong structural demand. Importantly, this strong demand for tower
slots leads directly to higher revenue since CTC is not affected by "higher speed lower
tariff" policies.
Crucially, cheap and easy access to local government resources for small cell
construction, together with the expectation of rising tenancy over existing macro towers,
leads CTC to project less than Rmb34bn of total CapEx p.a. in 2020 and 2021. CTC's
CapEx for the current year is also now expected to be well under the initial guidance of
Rmb34bn, at circa Rmb25bn.
Credit Suisse revised up its FY2018 and FY2019 net profit forecasts for CTC by 1.1% and
3.4%, respectively, on lower depreciation thanks to the lower-than-expected CapEx in 2018.
(KL)