Credit Suisse maintained its target price for China Unicom (00762) unchanged at HK$8.55 but downgraded its rating to "neutral" from "outperform".
The research house said Unicom's 9-month results missed on core numbers. EBITDA grew by 10.4% YoY in 9-month, largely due to the implementation of IFRS 16; tower lease payments are no longer being charged at the EBITDA level, but instead, are being booked as depreciation and interest under finance leases.
Credit Suisse revised down its FY2019 service revenue, EBITDA, and net profit forecasts by 1.9%, 2.3%, and 1.4% respectively. However, after a share price rally following the
announcement of "co-build co-share", Credit Suisse sees limited upside, particularly given the weak core results.
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