UBS: Lowers China Tower's target price to HKD 13.5, maintains "Buy" rating
UBS released a research report stating that China Tower's revenue, EBITDA, and net profit for the third quarter increased by 2.1%, 0.4%, and 4.5% year-on-year, respectively, which were about 1% to 3% lower than market forecasts, mainly due to a decrease in tower revenue, rising maintenance costs, and credit impairment. The bank indicated that after China Tower announced its latest performance, considering the downward revision of tower revenue forecasts and the upward revision of operating expense forecasts, it has lowered its net profit forecast for 2025 to 2028 by 4% to 19%, and reduced the target price from HKD 15 to HKD 13.5, maintaining a "Buy" rating. 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
According to the Zhitong Finance APP, UBS released a research report stating that China Tower (00788) saw its revenue, EBITDA, and net profit in the third quarter increase by 2.1%, 0.4%, and 4.5% year-on-year, respectively, which were about 1% to 3% lower than market forecasts. This was mainly due to a decrease in tower revenue, rising maintenance costs, and credit impairment. The bank indicated that after China Tower announced its latest performance, considering the downward revision of tower revenue forecasts and the upward revision of operating expense forecasts, it has lowered its net profit forecast for 2025 to 2028 by 4% to 19%, and reduced the target price from HKD 15 to HKD 13.5, maintaining a "Buy" rating.
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
