Morgan Stanley: If HKT-SS's subsidiary is revoked of its operating qualifications in the United States, the impact on fundamentals is expected to be manageable

Morgan Stanley released a research report stating that the Federal Communications Commission (FCC) plans to revoke the operating qualifications of HKT International, a wholly-owned subsidiary of HKT-SS, in the United States, due to HKT's connections with China Unicom Americas. Morgan Stanley believes that if the revocation process takes effect, the impact on HKT's fundamentals should be manageable, as its international business revenue (excluding Greater China) accounted for less than 7% of total revenue in 2024, with the U.S. market representing only about 1%, and the profit margin of international business is generally lower than that of local business. However, due to the uncertainty of the situation, negative market sentiment may continue to fester. The firm currently sets a target price of HKD 13 for HKT and maintains an "Overweight" rating