BOC International: Raises target price for CHINACOMSERVICE to HKD 5.15, reiterates rating "Buy"

CITIC International released a research report stating that CHINACOMSERVICE's net profit in the first half of the year increased by 0.2% year-on-year to RMB 2.13 billion, in line with expectations, while total revenue grew by 3.4% year-on-year to RMB 76.94 billion, exceeding expectations. The gross profit margin decreased by 0.6 percentage points year-on-year to 10.3%, mainly due to clients' continued efforts to reduce costs in the design and construction of key capital investment projects. The bank stated that it has raised its target price to HKD 5.15 and adjusted the group's earnings forecasts for 2025 to 2027, reiterating its rating as "Buy." The bank noted that benefiting from strong demand for digital infrastructure construction, non-telecom and international business revenue increased by 12.6% year-on-year, and it is expected that with several local Chinese GPU manufacturers accelerating mass production, telecom operators' capital expenditures will significantly accelerate in the second half of the year