Deutsche Bank Upgrades China Unicom Hong Kong (CHU) to Buy

Deutsche Bank upgraded China Unicom Hong Kong (NYSE: CHU) from Hold to Buy and raised their price target from 12.30 (HKD) to 15.40 (HKD)

Analyst Alan Hellawell commented, "Applying our base case scenario of operational savings, one-off gain from asset injection and the incremental value from towerco IPO, we revise our 2015/16/17E NP forecast substantially and arrive at a TP of HK$108.5 for CM, HK$15.4 for CU and HK$6.8 for CT, respectively. We therefore upgrade CU to Buy given the largest potential benefits from the process. Our sector valuation is based on a DCF approach, which we apply due to the relatively predictable cashflow profiles of China’s telcos. We utilize a 8.9% WACC for CM and CT, and 8.5% WACC for CU and a 0% perpetual growth rate. CoD is 4.5%, Debt/Equity ratio is 10/90."

For an analyst ratings summary and ratings history on China Unicom Hong Kong click here. For more ratings news on China Unicom Hong Kong click here.

Shares of China Unicom Hong Kong closed at $16.20 yesterday.

You May Also Be Interested In

• Jefferies Upgrades Husqvarna AB (HUSQB:SS) to Buy
• Raymond James Upgrades Kratos Defense & Security (KTOS) to Strong Buy
• Alfa Laval AB (ALFA:SS) (ALFVY) PT Raised to SEK475 at Barclays