Nomura's research report stated that the rating of China United Network Communications (00762) was downgraded from "buy" to "neutral", and the target price was lowered from HKD 7.1 to HKD 7.
The bank believes that Unicom's industrial internet business may be affected by the slowdown in economic growth and may lead to service revenue growth in the second quarter below the industry average. At the same time, it is believed that Unicom's expansion in the government-enterprise digital business may affect its accounts receivable, leading to bad debt risks and slower cash flow growth.
The report pointed out that, benefited from stricter cost control, the bank believes that the company should be able to maintain a good net profit growth rate compared to the low unit revenue growth forecast in the second quarter. The bank lowered its revenue forecast for fiscal years 2024 to 2026 by 2% to 4%, and profit forecast by 4% to 6%, to reflect the slowing growth of emerging businesses.