[ET Net News Agency, 25 March 2020] Daiwa Research lowered its target price for China
Telecom (CT)(00728) to HK$3.92 from HK$4.87 on earnings revisions and maintained its "buy"
rating.
The research house still expects CT to generate attractive cash flows (2020-22: 9%
average yield; dividend yield of 5.4%) over the 5G cycle by virtue of its network-sharing
business model.
Daiwa said CT's 4Q 2019 results were below its expectations. Hence, Daiwa lowered its
2020-21 service revenue and EBITDA margin forecasts by 4-6% and 0.3-0.4pp. It believes CT
and China Unicom (00762) are effective portfolio substitutes, given their network-sharing
business model. (KL)