[ET Net News Agency, 31 July 2020] Morgan Stanley lowered its target price for China
Tower (CTC)(00788) to HK$1.8 from HK$2.2 and maintained its "overweight" rating.
The research house sees revenue and EBITDA CAGRs of 7.7% and 7.9%, respectively, over
2019-22, driving a 33% CAGR in earnings and 46% CAGR in dividends due to operating
leverage and gradual payout increase.
It said CTC trades at a significant valuation discount of 6-7x 2020 EV/EBITDA, versus
10-12x for Asian peers and 10-30x for global peers, which is attractive given a similar 8%
2019-22 EBITDA CAGR.
Morgan forecast 2Q tower revenue of Rmb18.3bn (+1.8%), DAS (distributed antenna systems)
and TSSAI revenue of Rmb1.76bn (+61.5%, 8.7% of total revenue), EBITDA of Rmb14.7bn
(+3.1%), and net profit of Rmb1.5bn (+20%). (KL)