[ET Net News Agency, 3 April 2020] Nomura lowered its target price for China Telecom
(CT)(00728) to HK$2.6 from HK$3.5 and maintained its "neutral" rating.
The research house said CT's management has guided for total capex of CNY85bn, with 5G
capex of CNY45.3bn for 2020, implying under-control moderate capex growth. Nomura thinks
the 5G network ramp-up should help improve the company's revenue growth, while
profitability should be under pressure with surging costs in the initial stages.
Moreover, it said the cannibalization risk to the broadband business from 5G network
should not be overlooked. Nomura cuts its 2020-21 earnings forecasts by 4% each to reflect
slower 5G ARPU growth at the early stage of customer expansion. (KL)