China Unicom Rises to 2 1/2 Year High on UBS Growth Outlook
April 08, 2011, 4:57 AM EDTBy Bloomberg News
(Updates with UBS forecast in first paragraph.)
April 8 (Bloomberg) -- China Unicom (Hong Kong) Ltd., the nation’s second-largest mobile phone company, rose to the highest level in more than 2 ½ years after UBS AG raised its forecast for the shares because of “explosive” growth.
China Unicom gained 6.5 percent to HK$14.42 on the Hong Kong stock exchange, the highest level since Aug. 14, 2008. The benchmark Hang Seng Index rose 0.5 percent.
UBS analyst Wang Jinjin today raised her 12-month price estimate for China Unicom’s shares by 47 percent to HK$20 from HK$13.60 due to growth in subscribers for the company’s third- generation network service. Wang titled her report “Explosive 3G growth approaching.” Unicom is gaining share of high-end data customers from market-leader China Mobile Ltd., she wrote.
“We believe 3G and broadband will serve as two main growth drivers to the whole industry, and Unicom will be the key beneficiary,” Wang wrote in the report to clients today. “China’s market presents a unique case that the dominant operator China Mobile is being handicapped by an inferior technology TD-SCDMA, which provides a golden opportunity for China Unicom.”
Wang “substantially increased” her projection for Unicom’s 3G subscribers for 2011, 2012 and 2013 to 28 million, 32 million, and 35 million, from her previous estimates of 18 million, 18 million and 25 million, she wrote. Wang kept her rating on the stock at “buy.”
China Mobile dropped 0.2 percent to HK$73.70.
--With assistance from Edmond Lococo in Beijing. Editors: Garry Smith, Anand Krishnamoorthy
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To contact the editor responsible for this story: Young-Sam Cho at ycho2@bloomberg.net
