Jinwu Financial News | According to the HSBC Global Research and Development Report, China Tower (00788)'s EBITDA for the first quarter of 2024 increased 3% year-on-year, and its performance was stable. However, revenue from the tower business increased by only 0.6% year over year. HSBC believes this is because telecom companies are shifting more capital expenditure to growth businesses.
According to the bank, the “two wings” business contribution is growing and Hongta's trend is relatively slow, putting more pressure on the core telecom business. The bank is looking for details on the rapid growth of its core business or “two wings” business as a potential catalyst to change the bank's views.
The bank raised its 2024 revenue and EBITDA forecasts by 0.9% and 1.3%, respectively. At the same time, excessive depreciation (D&A) forecasts were reduced, so the profit and profit forecasts for 24/25/26 were revised up by 4.9%, 9.9%, and 8.9%, respectively. The target price was raised by 2.7% to HK$0.88, maintaining the “hold” rating.