As of press time, the telecommunication sector collectively fell today, with China Telecom (00728) falling by 5.84% to HKD 4.68, China Unicom (00762) falling by 4.49% to HKD 7.02, and China Mobile (00941) falling by 1.89% to HKD 75.35.
According to the Wisdom Wealth App, the telecommunication sector collectively fell today, with China Telecom (00728) falling by 5.84% to HKD 4.68, China Unicom (00762) falling by 4.49% to HKD 7.02, and China Mobile (00941) falling by 1.89% to HKD 75.35.
JPMorgan release a report stating that due to the pressure on new digital businesses such as cloud and datacenter businesses, it’s estimated that the service revenue growth of the three major telecommunications operators, China Mobile, China Telecom, and China Unicom, will slow down, from a year-on-year increase of 5%, 4% and 3% in the first quarter to 2%, 3% and 3% in the second quarter. It is believed that the telecom operators will offset the pressure of revenue growth through strict cost control. The bank expects the profit growth of China Mobile and China Unicom to remain stable at an annual growth rate of 5% and 10%, respectively. However, it is expected that net profit of China Telecom will slow from a year-on-year growth of 8% in the first quarter to a growth of 6% in the second quarter.
The bank expressed a "bullish" rating on the three major telecoms stocks, with China Mobile being the preferred one, followed by China Unicom, and finally China Telecom. The bank is optimistic that China Mobile’s earnings can reach a yield of 7% and a composite annual dividend growth rate of 7%. China Mobile is highly defensive in volatile markets and has potential to catch up after falling behind compared to China Telecom and Unicom in terms of stock price.