The performance of Chinese telecoms in 4Q21 was mixed, reported JPMorgan. The attractive dividend policy of CHINA MOBILE (00941.HK) exceeded the market's expectations, while the growth of CHINA UNICOM (00762.HK)'s dividend payout ratio was disappointing, the broker illustrated.
JPMorgan viewed CHINA MOBILE as the sector top pick, favoring its strong balance sheet, enticing 10% dividend yield with high visibility of growth and potential share price support from the H-share repurchase program. CHINA MOBILE was rated at Overweight, with a target price of $70.
CHINA TELECOM (00728.HK) was also preferred, on the back of its 9% dividend yield, robust growth and extensive exposure to non-traditional fixed-line businesses. CHINA UNICOM, on the other hand, was not recommended due to its relatively weak dividend profile and balance sheet. CHINA TOWER (00788.HK)'s share price, meanwhile, was projected to remain flattish.
The broker's preference order, from the most favourite to the least, for the telecom sector was CHINA MOBILE, CHINA TELECOM (Overweight/ TP $3.7), CHINA UNICOM (Neutral/ TP $4.3) and CHINA TOWER (Neutral/ TP $0.95).
JPMorgan viewed CHINA MOBILE as the sector top pick, favoring its strong balance sheet, enticing 10% dividend yield with high visibility of growth and potential share price support from the H-share repurchase program. CHINA MOBILE was rated at Overweight, with a target price of $70.
CHINA TELECOM (00728.HK) was also preferred, on the back of its 9% dividend yield, robust growth and extensive exposure to non-traditional fixed-line businesses. CHINA UNICOM, on the other hand, was not recommended due to its relatively weak dividend profile and balance sheet. CHINA TOWER (00788.HK)'s share price, meanwhile, was projected to remain flattish.
The broker's preference order, from the most favourite to the least, for the telecom sector was CHINA MOBILE, CHINA TELECOM (Overweight/ TP $3.7), CHINA UNICOM (Neutral/ TP $4.3) and CHINA TOWER (Neutral/ TP $0.95).