[ET Net News Agency, 16 April 2018] Morgan Stanley expects steady service revenue
growth in China ahead of data roaming impact in 2H, despite a 2-3% negative impact for
China Mobile (CM)(00941) and China Telecom (CT)(00728) (but not China Unicom) from
adoption of IFRS 15.
China Unicom (CU)(00726) is Morgan's top pick, and the research house sees solid 1Q
results as a positive catalyst. It forecast service revenue and EBITDA to grow 8% and 9%
YoY in 1Q, driven by mobile share gain and 30%+ growth from industrial Internet, resulting
in a 3x increase in net profit thanks to operating leverage.
CT also benefits from mobile share gain and continued cost control. Morgan forecast
service revenue and EBITDA to grow 6% YoY, but higher depreciation slows net profit growth
to 4%.
It stayed "overweight" on CU and CT and "underweight" on CM, but raised its price
targets from HK$67 to HK$70 for CM, from HK$4.1 to HK$4.2 for CT, from HK$12 to HK$12.5
for CU. (KL)
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00941 CHINA MOBILE
Nominal 
72.300 +0.400 (+0.556%) Research Report
16/04/2018 18:01
[I-bank focus]Morgan raises target prices for China telcos
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