[ET Net News Agency, 20 April 2020] Citi Research raised its target price for China
Tower (00788) to HK$1.72 from HK$1.67 and maintained its "neutral" rating.
The research house said China Tower's 1Q net profit of Rmb1.5bn was 3% lower than Citi's
estimates. It believes China Tower's telco revenue growth pressure and 5G growth
challenges (indicated by Chinese telcos' lower-than-expected 5G capex guidance) could
limit its further rerating.
Citi expects that aggregate tower rental cost of Chinese telcos will likely grow at a
similar pace in 2020 to that in 2019, with industry BTS adds in 2020 smaller than those in
2019. Citi sees risk of continued telco revenue misses. (KL)