HSBC Global Research cut its target price for China Unicom (00762) to HK$10.9 from HK$11.2 and maintained its "buy" rating.
Having failed to secure a meaningful sharing deal with 4G, China Unicom looks to be better positioned with 5G, said the research house. In HSBC's bull case, it halved the number of 5G base stations deployed by Unicom relative to its base case. In practice, this is likely to be partly offset by higher spending on other areas, such as fixed-line.
China Unicom has focused on its mobile data business. It has successfully launched a series of data plans that have been well received by customers. Any increase in competition in the mobile market could compress its ARPU and significantly affect its revenue and FCF growth, HSBC added.
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