China Tower V China Mobile: Focus on China Mobile's Returns, Not China Tower's Growth

China Tower Reports 3Q18 Results in Line but Implies Higher Capex.

China Telecom/Unicom Merger Opportunity to Large to Ignore? We See $50bn+ Synergy Value (Or More)

China Tower IPO - A Low Return Entity Created to Boost Telco Returns.

China Tower: China Unicom – China Telecom Potential Merger, Double Whammy for Minority Shareholders

China Tower: One Week Later Gloves Come Off (Close Price Below Listing Price)

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New Street Research

Research is provided by our team of experienced analysts. Our work is idea driven, based on independence of thought, sector expertise, and firmly focused on fundamentals and valuation of telecoms and internet names globally. New Street is headquartered in London with offices in New York, Singapore and Australia. 

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Japan Telecoms
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Equity Bottom-Up

<p>We recently discussed the benefits of a merger of <a href="https://www.smartkarma.com/entities/1016" target="_blank" data-smartkarma-citation="entities:1016:1">China Unicom (762 HK)</a> and <a href="https://www.smartkarma.com/entities/1015" target="_blank" data-smartkarma-citation="entities:1015:1">China Telecom (728 HK)</a>. Assuming a network merger, we suggest the NPV of available synergies would be worth around $50bn (or more). What is good for the telcos is not so good for recently listed <a href="https://www.smartkarma.com/entities/27037" target="_blank" data-smartkarma-citation="entities:27037:1">China Tower (788 HK)</a>. If China moves to a 2 player market, the impact on China Tower would be substantial, reducing EBITDA by around 10%. With a low yield (1%), and multiples at a large premium to its major shareholders (the telcos) the risks look to be on the downside for China Tower. In the note discussed below, <a href="https://www.smartkarma.com/profiles/1917" target="_blank" data-smartkarma-citation="accounts:1917">Chris Hoare</a> retains a Reduce recommendation with a target price of HK$1.</p>

We recently discussed the benefits of a merger of China Unicom (762 HK) and China Telecom (728 HK). Assuming a network merger, we suggest the NPV of available synergies would be worth around $50bn (or more). What is good for the telcos is not so good for recently listed China Tower (788 HK). If China moves to a 2 player market, the impact on China Tower would be substantial, reducing EBITDA by around 10%. With a low yield (1%), and multiples at a large premium to its major shareholders (the telcos) the risks look to be on the downside for China Tower. In the note discussed below, Chris Hoare retains a Reduce recommendation with a target price of HK$1.

中国タワー：中国聯通と中国電信が合併したら、どこまで倒れるか？