[ET Net News Agency, 18 January 2021] Morgan Stanley lowered its target price for China
Unicom (CU) (00762) to HK$7 from HK$8 and maintained its "overweight" rating.
The research house believes CU's current low valuation factors in 5G capex risks,
intensified competition, and regulatory risks. CU is uniquely exposed to five industrial
Internet businesses that require telecom infrastructure and Internet capability - Internet
data centers (IDC), IT services (ICT), Internet of things (IoT), cloud, and big data.
Morgan forecast a 19% revenue CAGR in 2020-23, contributing 23% of 2023 service revenue.
At trough valuation, risk-reward is attractive given limited downside from traditional
telecoms and unique exposure to the industrial Internet, which the research house believes
is not in the price. (KL)