Damo believes that the growth of the industry will be divided in the second half of 2023, with the growth of Hong Kong Telecom (06823) being the most obvious and stable.
The Zhitong Finance App learned that although the revaluation benefits all telecom companies with high dividend rates, it is recommended to focus on the industry leader Hong Kong Telecom (06823), which is attracting 8.5% dividend rate in 2023. Considering the resilience of future earnings and dividend growth, the compound annual dividend growth rate per share is expected to reach 4% in 2022 to 2025, reaffirming the “increase in holdings” rating of HK$10.5, which means that the dividend rate will reach 7%. Furthermore, the bank believes that the competitive pattern of Hong Kong's mobile communications industry is stabilizing, and that the competitive pattern of broadband communications is also improving. However, it believes that industry growth will be divided in the second half of 2023. Among them, the growth of Hong Kong Telecom is the most obvious and stable.
The bank mentioned that the target price of Digitom (00315) was also lowered by 4% to HK$4.5 from HK$4.7 to reflect a more moderate increase in local service ARPU, partially offset by a better-than-expected recovery in roaming services. The earnings forecast per share for the end of June 2024 was reduced to $0.43, 9% lower than the previous forecast, respectively, and maintained a “in sync with the market” rating.