BOCI Research lifted its target price for China Communications Services (00552) to HK$5.98 from HK$6.61 and maintained its "buy" rating.
The research house expects a solid recovery of TIS/BPO (telecommunications infrastructure services/business process outsourcing) sales and a stable margin to drive 17% earnings growth in 2H 2020. Keen demand in industrial internet will drive non-telco sales from domestic government and enterprise market, and become the primary growth driver from 2021 onwards.
BOCI also considers the share attractive as currently trading at 6.1x 2021 PER, 4.5%
dividend yield, and 25% discount to their 2020 book value.