Nomura: The outlook for the mainland telecommunications industry is challenging this year, downgrading China Telecom and China Unicom ratings to "Neutral"

Nomura's research report indicates that national official data shows that the performance of the telecommunications industry in mainland China will be weak in 2025, with service revenue growth slowing from the previous value of 3.2% to 0.7%. This mainly reflects factors such as market saturation in core business, slowing growth in emerging businesses, intensified competition, and a weak macro environment.

Industry mobile service revenue fell by 3.1% year-on-year to RMB 609.7 billion. Data shows that the mobile user penetration rate has reached 130%, which is 22.5 percentage points higher than the global average of 107.5%; competition among the three major telecom operators is becoming increasingly fierce, making this year's outlook challenging.

The firm maintains a "Buy" rating on China Mobile (00941.HK) H shares, with a target price lowered from HKD 106 to HKD 96. At the same time, it downgraded China Telecom (00728.HK) and China Unicom (00762.HK) H shares to "Neutral," with China Telecom's target price lowered from HKD 7.2 to HKD 5.5, and China Unicom's target price lowered from HKD 11.7 to HKD 8