UBS lowers China Tower's target price to 13.5 yuan and reduces earnings forecast

AASTOCKS
2025.10.20 03:51

UBS published a research report indicating that China Tower (00788.HK) saw its revenue, EBITDA, and net profit grow by 2.1%, 0.4%, and 4.5% year-on-year in the third quarter, which were approximately 1% to 3% lower than market forecasts, mainly due to a decrease in tower revenue, rising maintenance costs, and credit impairment.

However, due to technological improvements and maintenance enhancements, China Tower has extended the depreciation period of its DAS assets from 7 years to 10 years. According to the bank's estimates, this accounting change will reduce the company's depreciation expenses by approximately RMB 870 million this year, which is believed to help support its net profit and maintain stable dividend growth amid macro headwinds.

The bank stated that after China Tower announced its latest results, considering the downward revision of tower revenue forecasts and the upward revision of operating expense forecasts, it has lowered its net profit forecasts for 2025 to 2028 by 4% to 19%, with the target price reduced from HKD 15 to HKD 13.5, while maintaining a "Buy" rating

Source: AASTOCKS The copyright of this article belongs to the original author/organization.
The views expressed herein are solely those of the author and do not reflect the stance of the platform. The content is intended for investment reference purposes only and shall not be considered as investment advice. Please contact us if you have any questions or suggestions regarding the content services provided by the platform.