Damo expects the total annual return of HKT-SS (06823) to exceed 10% (dividend rate and dividend growth) even without any critical valuation.
The Zhitong Finance App learned that Morgan Stanley released a research report stating that it reaffirmed the “increase” rating of Hong Kong Telecom - SS (06823), with a target price of HK$10.5. The bank believes that HKT's dividend rate of 9% this year, and considering the estimated 3.5% increase in dividends this year, even if the US 10-year bond interest rate remains at 4% to 4.5% for a longer period of time, HKT's valuation is still attractive.
The report indicates that due to market expectations that the US Federal Reserve will reduce the number of interest rate cuts this year and slow down, HKT's dividend rate was lowered slightly to 9% recently. Compared with other HKT providers, real estate/housing trusts and utility stocks, HKT's current dividend rate and dividend growth are attractive. The bank expects HKT's total annual return of over 10% (dividend rate and dividend growth) even without any major valuation reviews.