JPMorgan released a report maintaining a "neutral" rating on China Tower, believing that only the capital expenditures of Chinese telecommunications companies entering an upward trend can drive the company's sustained revenue and profit growth, at which time China Tower can receive re-evaluation of its valuation.
JPMorgan believes that the financial situation of China Tower in the second quarter has improved, but it still maintains a cautious view on the stock. It does not expect the second quarter earnings conference to lead to a significant re-evaluation or sustained rebound in the stock. Because in the case of continued reduction in capital expenditures by telecommunications companies, it is unlikely to see structural acceleration of revenue growth. In addition, JPMorgan pointed out that the market has priced in the profit-saving after the depreciation of China Tower. At the same time, it believes that the market is overly optimistic about the recent financial situation of China Tower, and expects the market's profit forecasts for its 2024 and 2025 fiscal years to have downward space of 3% and 5%, respectively.
