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<Research>CLSA: Cost Control Expected to Back Earnings & Dividends of CN Telecoms; Top Pick CHINA MOBILE
Recommend 22 Positive 32 Negative 11 |
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HK-listed Chinese telecoms are set to announce their interim results for 2025, with sector revenue growth expected to slow to around 1-2%, CLSA said in its research report, attributable this to decelerated industrial internet revenue as a result of the soft macro and more cautious project selection. Although the AI boom galvanized demand for IDC, CLSA assumed that telecom operators' AI cloud products are not yet mature, and mobile service revenue is facing pressures from market saturation and intensified competition. However, it is expected that net profit can still achieve growth of 3-9%, through stringent cost control and reduced capex, with dividend yields remaining at an attractive level of 5-6%. CLSA forecast that the interim service revenue of CHINA MOBILE (00941.HK), CHINA TELECOM (00728.HK), and CHINA UNICOM (00762.HK) will grow by 1.3%, 1.1%, and 2.4% to RMB469 billion, RMB249 billion, and RMB180 billion, respectively. The net profit was forecast to grow by 3.4%, 7%, and 8.8% to RMB82.9 billion, RMB23.3 billion, and RMB15 billion, respectively, with full-year dividend yields anticipated to reach 6.4%, 5%, and 5.6%. Citi's top pick was CHINA MOBILE, favoring its higher dividend yield, and it rated CHINA MOBILE, CHINA TELECOM, and CHINA UNICOM as Outperform, with target prices of HKD86, HKD6.2, and HKD9.5. AASTOCKS Financial News Website: www.aastocks.com |
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