UBS Group has released a research report stating that it has raised the target price for PCCW (00008) from HKD 4.4 to HKD 4.6. Based on raising the target price for Hong Kong Telecom-SS (06823) to HKD 12.5, and adjusting profit forecasts in response to the mid-term business performance of PCCW, the stock rating remains "buy".
The bank pointed out that the forecast dividend yield of the company's stock price is 9.7 cents, which provides support for the stock price. If the Stock Connect investors are exempted from dividend tax, it will be a potential catalyst for the stock. The mid-term dividend per share of the company is the same as last year, at 9.77 Hong Kong cents per share, compared to an average dividend payout per unit of Hong Kong Telecom, which is up 2.7% year-on-year. This means that the company has distributed 97% of Hong Kong Telecom's dividend to shareholders, which is similar to 2023, and is consistent with the bank's full-year dividend payout forecast.