[ET Net News Agency, 15 October 2020] Morgan Stanley forecast China telecom's service
revenue growth to sustain at 3.2% in 3Q (versus 3.4% in 2Q). The research house expects
mobile revenue to remain stable (versus +1.1% in 2Q) with stabilizing ARPU driven by 5G
adoptions.
It forecast China Mobile (CM)(00941)(overweight/price target of HK$80) forecast 3Q
service revenue of Rmb164.9bn (+2%), EBITDA of Rmb72.9bn (-2%), and net profit of
Rmb25.7bn (-0.2%). It estimated mobile service revenue will increase 0.3%, fixed-line
revenue will grow 10%, and EBITDA margin will fall 1.8ppts to 44.2%.
Regarding China Telecom (CT)(00728)(overweight/price target of HK$3.40), it forecast 3Q
service revenue of Rmb93.1bn (+4.8%), EBITDA of Rmb28.6bn (-0.2%), and net profit of
Rmb4.5bn (+1.5%). It estimated mobile service revenues increase by 3.0%, fixed-line
revenue will increase by 6.5%, and EBITDA margin will fall 1.5ppt to 30.8%.
As for China Unicom (CU)(00762)(overweight/price target of HK$8), Morgan forecast 3Q
service revenue of Rmb68.2bn (+4.0%), EBITDA of Rmb24.2bn (+2.5%), and net profit of
Rmb3.3bn (+11.6%). It estimated mobile service revenue will increase by 1.5%, while
fixed-line revenue grows 8% and EBITDA margin falls 0.5ppt to 35.5%. (KL)