[ET Net News Agency, 30 September 2020] Nomura lowered its target price for China
Telecom (CT)(00728) to HK$2.6 from HK$3.1 and maintained its "neutral" rating.
The research house trimmed its 2021/22 capex estimates by 4%/6% for the three telcos to
reflect the impact of escalated US sanctions on Huawei and telcos' intentions to roll out
some 5G infrastructure on a lower-band spectrum.
Nomura believes CT should continue to see industry-leading service revenue growth in the
mobile business, with the progressive recovery of the wireline business, thanks to
relieved market competition and regulatory environment.
Meanwhile, Nomura thinks 5G network operation costs are still sub-optimal, which may
weigh on CT's profitability. It slightly cut its 2020-22 revenue and earnings forecasts
by 0-1% each. (KL)