C114-UBS (UBS) analysis that, China unicom (the Po) although short-term movements in the downturn, but which long-term growth trends remain unchanged, UBS maintain the force of this "buy" rating, discounted cash flow based on the price target of $9 (the weighted average cost of capital, and sustainable growth rate 8.1% 2%).
According to data released by the China unicom in January, 2012, 3 G users 3.05 million net, respectively, less than 2011 years the November 338 and December 3.49 million. Ubs think, this is largely attributed to the Spring Festival of seasonal factors, and February data may also be affected by this.
So far in early, unicom shares have lost 6%, run the Shanghai index lost 14%. The next three months the stock prices could continue to pressure, ubs think the short term unicom still lack good, is expected to: 1) February 3 G users number will keep net downturn (estimate between between 330-3.4 million); 2) on March 22, 2012 annual report released will be lower than expected.
Although the short term trend downturn, but ubs valued unicom the development prospect of the medium and long term, is expected to: 1) WCDMA cellphones and the third party distribution channels momentum going well will help unicom took more market share; 2) as long as LTE in China there is no into reality, unicom shall enjoy the premium. We estimate issued the first time for LTE licence in the first half of 2014; 3) China mobile (the Po) not asking good network solutions to meet the fast growth the data flow.
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