DBS analyst Tsz Wang maintained a Buy rating on HKBN (HKBNF – Research Report) yesterday and set a price target of HK$5.70.
Tsz Wang has given his Buy rating due to a combination of factors that indicate strong potential for HKBN’s growth and profitability. In the residential broadband market, HKBN is realigning its strategy to focus on Average Revenue Per User (ARPU) maximization, having already achieved a significant subscriber base of 920k. The company’s pursuit of higher ARPU is supported by strategic partnerships with various Over-The-Top (OTT) content providers and by promoting higher bandwidth solutions, which has resulted in an upward trend in new contract ARPU.
Additionally, Tsz Wang’s optimistic outlook is bolstered by HKBN’s enterprise business segment, which shows considerable promise as a key growth driver. The enterprise segment’s Total Addressable Market (TAM) is notably larger than the traditional telecom industry, and HKBN has demonstrated positive momentum with an 18% growth in orders during the second half of the fiscal year. This robust backlog is anticipated to contribute meaningfully to future revenue, underpinning the expectation of accelerated growth in Adjusted Funds From Operations (AFFO), which further justifies the Buy rating.
Wang covers the Technology sector, focusing on stocks such as China Mobile, China Unicom (Hong Kong), and Kingdee International Software Group Co. According to TipRanks, Wang has an average return of 5.0% and a 58.77% success rate on recommended stocks.
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HKBN (HKBNF) Company Description:
HKBN Ltd. is an investment holding company, which engages in the provision of fixed telecommunications network services. It also provides residential fibre broadband services; wireless fidelity access; communication, entertainment, and cloud solutions; and administrative support services. The company was founded on November 26, 2014 and is headquartered in Hong Kong.
