Citi Research lowered its target price for China Tower (00788) to HK$1.8 from HK$2 and maintained its "neutral" rating.
The research house said China Tower has a 96% market share in the China telecom tower market. It views China Tower as a value play with stable growth, healthy FCF that could lead to favorable cash returns from FY2020, and scope for earnings upgrade in case of fast non-telco business growth.
However, China Tower's telco revenue growth pressure and 5G growth challenges could limit a further re-rating. China Unicom (00762)/China Telecom (00728) network sharing
further dims long-term growth.
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