[ET Net News Agency, 5 November 2018] Jefferies Research lifted its target price for
China Unicom (CU)(00762) to HK$24.23 from HK$20.66, and maintained its "buy" rating.
The research house said CU offers the same 2x upside as China Telecom (00728) in its
CT/CU merger scenario, which Jefferies deemed increasingly likely and assumed would be
done via a share swap.
Its new target price is based on CU having a 46% share of the merged company, which it
valued at HK$1,552bn on DCF, close to China Mobile's (00941). Upside would come from an
estimated Rmb384bn of cost savings (2020-2026) in capex, marketing, network operations and
tower leasing.
Without a merger, Jefferies said its valuation of CU would be HK$17.42-18.33. (KL)