Nomura tweaked its target price for China Tower (00788) to HK$2.1 from HK$2.15 and maintained its "buy" rating.
The research house said China Tower's 1H results missed its estimates. Nomura thinks the shortfall was largely due to slow growth in the tower business (its revenue rose 1.6% in 1H and stayed flat in 2Q versus 1Q).
The COVID-19 and pricing negotiations with telecom carriers may have weighed on the tower business growth and margins, but Nomura does expect the company to regain momentum in 2H, thanks to accelerated 5G roll-out.
Nomura trimmed its 2020-22 earnings forecasts by 3.9-8.9% as it built in slower monetization of 5G demand.
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