[ET Net News Agency, 26 July 2018] Jefferies Research cited China Tower's (00788)
latest prospectus noting that the low-end of its proposed valuation range gives a post-IPO
value of Rmb188bn without the greenshoe provision.
Relative to the Rmb218bn reported by Bloomberg on July 12 as the low end, it seems to
have fallen by 14%. Even at the latest low end, the stake of China Telecom (00728) and
China Unicom (00762) in China Tower will still be worth 15% of their market cap, said the
research house.
But Jefferies continues to believe that China Tower's IPO is a non-event for the Chinese
telcos since: (1) the latter will not sell down their stakes in China Tower, (2) the
potential dividend stream China Tower will pay out to the Chinese telcos is small, and
there is no guarantee it will be passed on to the Chinese telcos' shareholders, and (3) it
does not impact the fundamentals of the Chinese telcos.
Telcos will likely book one-off gains, but only Unicom has dividend upside, Jefferies
said. It deemed Unicom its top "buy". (KL)
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00762 CHINA UNICOM
Nominal 
6.000 +0.050 (+0.840%) Disclosure of Interest
26/07/2018 11:45
[I-bank focus]China Tower's (00788) IPO non-event for telcos
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