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首页 德意志银行关于中国电信行业分析(英文)

德意志银行关于中国电信行业分析(英文).pdf

德意志银行关于中国电信行业分析(英文)

施策
2009-02-05 0人阅读 举报 0 0 暂无简介

简介:本文档为《德意志银行关于中国电信行业分析(英文)pdf》,可适用于市场营销领域

AsiaChinaChinaChinaChinaTelecommunicationsFixedLineJulyDon'tunderestimatetheinfluenceofinvestorsFungEeLim()fungeelimdbcomTwopositivedevelopmentsTworecentdevelopments(thecurbonirrationalpricecompetitionandtelcomergermediareports)suggestthegovernmentisgivingmorethoughttoshareholderreturnsandeffectivecompetitionAstelcoownershipgetsmoreinstitutionalised,thegovernmentwillfindithardertoignoreinvestors'opinionsTheyhavepouredUS$bnintothesectorDeutscheBankAGDeutscheBankdoesandseekstodobusinesswithcompaniescoveredinitsresearchreportsThus,investorsshouldbeawarethatthefirmmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreportInvestorsshouldconsiderthisreportasonlyasinglefactorinmakingtheirinvestmentdecisionDISCLOSURESANDANALYSTCERTIFICATIONSARELOCATEDINAPPENDIXChinaTelecomSectorEmergingThemesToprecommendationsChinaTelecomBuyCMHKBuyKeychangesNACompaniesfeaturedChinaUnicom(HK),HK$HoldAFFPE(x)EVEBITDA(x)Pricebook(x)ChinaTelecom(HK),HK$BuyAFFPE(x)EVEBITDA(x)Pricebook(x)CMHK(HK),HK$BuyAFFPE(x)EVEBITDA(x)Pricebook(x)TelecomasofGDPTelecomspendingTelecomvalueaddsofGDPSource:MIISectorvaluationFFFEVEBITDA(x)EVsub(US$)Source:DeutscheBankestimatesUpcomingeventsDateTelcointerimresultsHongKongSepMIIroadshowSingaporeHKJulyCompanyvisitBeijingAugRelatedrecentreportsDateKoreanMobileSector:AnotherasymmetricregulationJaeMinLeeJulPCCW:GovernmentrulesinPPCW'sfavourPiyushMubayiJulSignalstoNoiseBrianModoffJulTheHotlineViktorShvetsJulDocumentreleasedtocurbirrationalcompetitionOnJuly,theNDPCandMIIjointlyissuedanordertorequirethetelecomoperatorstostrengthentheirinternalcontrolsonpromotionscoveringtariffdiscounts,handsetsubsidiesandbonuspointsAlllocaltelecomcarriersmustshowwrittenheadquarters’authorisationwhenapplyingtothelocaltelecombureausforapprovaloftheirnewpromotionplansTelcomergers,thoughunlikelyfornow,notagoodideaDespiterecentpressspeculation,telcomergersmaynothappenHowever,thegovernmentcannolongerignoretheheftycostofirrationalcompetitiononcorporateprofitabilityandlongtermindustrydevelopmentFormorediscussionontelecommergers,pleaserefertoourJunereport“minusdoesnotequalandhowstockscoulddouble”MostindustryexpertsdonotbelievechangeisforthcomingIndustryexpertsdonotthinkDocumenthasmuchchanceofsucceeding,asasimilarorderinSeptfailedtomakecompetitionlessferociousormorerationalTheysaymergersaregenerallyseenasagoodidea,butministerialpoliticswouldhinderaquickconsensuspartlybecauseconsumerswouldcomplainGrowinginfluenceofinvestorsForeignandmainlandinvestorshaveinvestedUS$bnandUS$bnintelecomstocks,respectivelyWhiletheyareminorityshareholders,theirinfluenceisgrowingandhascontributedtobettercorporateperformanceChinaMobileisnowpayingdividendsandChinaUnicom’spriorityforitsCDMAbusinessisprofitabilityratherthansubscribernumbersSectorundervalueddiscountislargeenoughtobebuyersAtcurrentprices,thesectorisimplyingaverybearishlongtermEBITDAmarginordiscountrate,assumingterminalgrowthatUS$kGDPpercapitainFInourview,thesectorisundervaluedandthediscountissignificantandlargeenoughtocompensatefortherisksBuyChinaMobileandChinaTelecomGlobalEquityResearchCompanyBulletinJulyTelecommunicationsFixedLineChinaTelecomSectorPageDeutscheBankAGConsumersvsshareholdersTworecentdevelopmentsthecurbonirrationalpricecompetitionandtelcomergermediareportssuggestthatthegovernmentisgivingmorethoughttoshareholderreturnsAsmuchasthegovernmentwantsthetelcostooperateasprofitmaximisingbusinessentities,therealityisthattelecomtariffandserviceprovisionarehotpoliticalissues:consumersalwayswantlowertariffsandbetterservicesInourview,theinherentconflictofinterestbetweenthegovernment,shareholdersandconsumersisthebiggestimpedimenttomarketdrivenpricingasdiscussedinourAugnote:“Canthegovernmentovercomeitsconflictofinterest”Ratherthanrepeatourselves,thosereadersinterestedinthetopicshouldrefertothenotesmentionedinFigureFigure:Relevantresearcha~íÉa~íÉa~íÉa~íÉ==`çãé~åóLëÉÅíçê`çãé~åóLëÉÅíçê`çãé~åóLëÉÅíçê`çãé~åóLëÉÅíçê==qáíäÉqáíäÉqáíäÉqáíäÉ==JunChinaTelecomSectordoesnotequalJanChinaTelecomSectorChangingquanxiandinsearchoftransformationAugChinaTelecomSectorCanthegovernmentovercomeitsconflictofinterestJunChinaTelecomSectorRichsubscriber,poorsubscriber:ThoughtsonCPPMayChinaTelecomSectorEvolutionoftariffcompetition:GreaterpricingflexibilitylikelyNovChinaTelecomSectorPolicydirectionpast,presentandfutureOctChinaTelecomSectorGrowinginfluenceofChina'sprivatesectorSource:DeutscheBankAGestimates,Companydata�DocumentOnJuly,theNDPC(NationalDevelopmentReformCommission)andMII(MinistryofInformationIndustry)jointlyissuedanorder(knownasDocument)torequirethetelecomoperatorstostrengthentheirinternalcontrolonpromotionscoveringtariffdiscounts,handsetsubsidiesandbonuspointsAccordingtothedocument,alllocaltelecomcarriersmustshowwrittenheadquarters’authorisationwhenapplyingtothelocaltelecombureausforapprovaloftheirpromotionplans�TelecommergersTherecentpressspeculationontelcomergers(seeourJunereport“minusdoesnotequal”)wasreportedlysparkedbygrowingconcernsoverexcessivecompetitionanddecliningreturnoncapitalTheestablishmentoftheSASAC(StateAssetsSupervisionAdministrationCommission),whichhastakenovertheownershipofthetelcos,appearstohavehadanimpactongovernmentthinking,butitisstillunclearhowmuchclouttheagencyhaswithinthegovernmentThemajorityofourindustrycontactsdonotbelievechangeisforthcomingDocumentissaidtobelargelycosmeticratherthanaseriouspolicychangeInSept,theNDPCandMIIissuedasimilarorder,butthisdidnotmakecompetitionlessferociousormorerationalIndustryexpertssaythatmergersaregenerallyconsideredtobeagoodidea,butbelieveministerialpoliticsstandinthewayofaquickconsensusInanyevent,mergingfourtelcosintotwoorthreewouldnotbepoliticallypopular,asconsumersareboundtocomplainGovernmentvsprofitorientedinvestorsInvestorsgenerallybelievethegovernment(throughtheSASAC)doesnotcareaboutsharepriceperformanceorreturnoncapital(ROICforthelistedtelcosisonly)Astheycannotchangethefactthatthegovernmentisthecontrollingshareholderandisreluctanttorelinquishcontrol,manyinvestorschoosenottoinvestandothersdemandaheftydiscounttocompensateforthehigherinvestmentThegovernmentfavoursconsumersovershareholdersusuallythecasebutnoteverytimeJulyTelecommunicationsFixedLineChinaTelecomSectorDeutscheBankAGPagerisksOurtopdownvaluation(seethe“minusdoesnotequaltwo”reportdatedJun)suggestsChinesetelcosasawholeareatleastundervaluedTobefair,ChinaisnottheonlycountrywherethestateretainsmajoritycontrolSingapore,France,GermanyandIndiaareotherexamples,tonameafewButthedominanceofthestateownedChinesetelcos,whichgenerateofindustryrevenues,hasnoparallelintheglobalcontextInrecognitionoftheproblem,thegovernmenthasseparatedownership,managementandregulationofthetelcosamongseveralgovernmentagenciesawayfromtheMII,whichusedtocontroleverythingIntheory,thisshouldhelp,buttherealityisthatministerialpoliticswillnotdisappearovernightandconsensuswillbehardtoreachgiventhecomplexityofthetelcomissuesFigure:GovernmentownershipofincumbenttelecomoperatorGermanyFranceAustraliaIndonesiaSingaporeTaiwanMalaysiaChinaIndiaSource:DeutscheBankAGestimates,CompanydataTelecommaynotbeaveryexcitingsectorforinvestors,butitsimportancetoeconomicdevelopmentandtoChina’sambitiontomoveupthevaluechainiswithoutdoubtAccordingtoMIIstatistics,telecomvalueaddsarenowapproachingofnominalGDPandtelecomrevenuesaremorethanofGDP,higherthanthoseintheUS,HongKongandSingaporeClearly,telecomisasignificantcontributortoGDPperformanceandthegovernmentneedstoconsidermorethanjustwhatconcernsthetelecomserviceprovidersFigure:TelecomasofGDPTelecomspendingTelecomvalueaddsofGDPSource:MIIJulyTelecommunicationsFixedLineChinaTelecomSectorPageDeutscheBankAGGrowinginfluenceofinvestorsdownsiderisklimitedWhileinvestorsareminorityshareholders,theirinfluenceisgrowingandhascontributedtobettercorporateperformanceChinaMobileisnowpayingdividendsandChinaUnicom’spriorityforitsCDMAbusinessappearstobeprofitabilityratherthansubscribernumbers�ForeigncapitalhasplayedapivotalroleintherestructuringandrapidgrowthoftheChinatelecomindustryoverthepastdecadeWeestimateforeignequityinvestorsincludingVodafone(Buy),whichownsofChinaMobile(Buy)havepouredUS$bnintothesectorAsforforeigndirectinvestors,theyhavebeenrelativelycautious,withonlyATT(Sell)andSKTelecom(Buy)havingformedlocaljointventuresFigure:GovernmentinterestinChinaUnicomreducedtoCDMAnetworkHKListco(HK)UnicomBVI(BVI)PublicshareholdersAShareCo(CH)otherpromotersPublicshareholdersUnicomNewHorizonUnicomGroup(PRC)Source:DeutscheBankAGestimates,Companydata�DomesticinvestorsarealsobecomingamajorforcethankstoAsharelistingsandtheimminentintroductionofQDII(QualifiedDomesticInstitutionalInvestors)MainlandinvestorsnowownofAsharelistedChinaUnicomA(NR)andeffectivelycontrolofChinaUnicom(Hold)marginallylessthantheheldbyforeignshareholdersWithparentcompaniesofthelistedtelcosexpectedtofinancethecostlyGrollout,weexpectmoreAshareIPOsandhenceanincreaseinthecloutofmainlandinvestorsFigure:UnicomAmostactivelytradedstockinShanghaiino~åâáåÖo~åâáåÖo~åâáåÖo~åâáåÖ==píçÅâ=ÅçÇÉpíçÅâ=ÅçÇÉpíçÅâ=ÅçÇÉpíçÅâ=ÅçÇÉ`çãé~åó`çãé~åó`çãé~åó`çãé~åós~äìÉ=çÑ=ëÜ~êÉë=íê~ÇÉÇs~äìÉ=çÑ=ëÜ~êÉë=íê~ÇÉÇs~äìÉ=çÑ=ëÜ~êÉë=íê~ÇÉÇs~äìÉ=çÑ=ëÜ~êÉë=íê~ÇÉÇmêçmêçmêçmêçéçêíáçå=çÑ=íçí~äéçêíáçå=çÑ=íçí~äéçêíáçå=çÑ=íçí~äéçêíáçå=çÑ=íçí~äEojãFEojãFEojãFEojãFëÜ~êÉë=íê~ÇÉÇëÜ~êÉë=íê~ÇÉÇëÜ~êÉë=íê~ÇÉÇëÜ~êÉë=íê~ÇÉÇChinaUnitedTelecom,ChinaMerchantsBnak,Baosteel,Sinopec,ShanghaiPudongDevelopmentBank,Source:ShanghaiStockExchangeForeignandmainlandinvestorsareonthesamesidetheywanthigherreturnsandbettersharepriceperformanceOverall,theirinfluenceisincreasing,andastelcoownershipbecomemoreinstitutionalised,thegovernmentwillfindithardertoignoretheiropinionsOverthenexttwoyears,weestimatethegovernment’seffectiveinterestinthetelcoswillfalltoandevenbelowForeignershaveinjectedUS$bnintothetelcosJulyTelecommunicationsFixedLineChinaTelecomSectorDeutscheBankAGPageConclusion:discountislargeenoughInvestorsdemanddiscountwheninvestingintheChinatelecomsectorRisksarehigherthanmostothermarketsandgrowthisnolongerstrongalbeitonlytemporarilybecauseofseveretariffdeclines,negatingthepositiveimpactonvolumeexpansionCurrentvaluationdiscountslongtermEBITDAmarginAtcurrentlevels,China’stelecomindustry,whichhasanestimatedEVofUS$bn,ispricinginverybearishscenariosItisdiscounting:Figure:Telecomsectorvaluationatcurrentprices*aÉëÅêáéíáçåaÉëÅêáéíáçåaÉëÅêáéíáçåaÉëÅêáéíáçå==OMMOOMMOOMMOOMMOOMMPOMMPOMMPOMMPOMMQcOMMQcOMMQcOMMQcOMMRcOMMRcOMMRcOMMRcOMMScOMMScOMMScOMMScOMMTcOMMTcOMMTcOMMTcOMMUcOMMUcOMMUcOMMUcEVsales(x)EVEBITDA(x)EVFCF(x)EVsub(US$)Source:DeutscheBankAGestimates,Companydata*Includesunlistedprovinces�longtermEBITDAmarginor,�discountratewithterminalgrowthatUS$KGDPpercapitainFOurtopdownvaluationsuggeststhesectorisundervaluedUncertaintyovertheindustry’sfuturedirectionandindustrystructurecontinuetobeamajoroverhang,butthediscountissignificantenough,inourview,tocompensatefortherisksWithinthesector,wethinkChinaMobile(Buy)andChinaTelecom(Buy)areattractivelyvaluedFigure:DifferentperspectivesaÉëÅêáéíáçåaÉëÅêáéíáçåaÉëÅêáéíáçåaÉëÅêáéíáçå==dçîÉêåãÉåídçîÉêåãÉåídçîÉêåãÉåídçîÉêåãÉåíj~å~ÖÉãÉåí=j~å~ÖÉãÉåí=j~å~ÖÉãÉåí=j~å~ÖÉãÉåí=fåîÉëíçêfåîÉëíçêfåîÉëíçêfåîÉëíçêShorttermsharepricemovementNotimportantNotimportantImportantValuationNotatoppriorityaslongasassetsarenotsoldbelowbookvaluerecentformationofSASACmaychangeattitudeNotatoppriorityshareoptionsareinsignificantinoverallremunerationImportantinvestorshavealargeuniverseofstockstochoosefromCostofcapitalNotimportantNotimportantmanagersandemployeesarenotevaluatedonsharepriceperformanceImportantthelowerthecostofcapital,thehigherthevaluationDividendHardtosayMIIandChinaMobileGroupdonotneedmoneybutgovernmentrunsbudgetdeficitandhaspensionliabilitiesrecentformationofSASACmaychangeattitudeNotimportantmanagersandemployeesdonothavesignificantshareholdingsImportantinvestorsviewChinaMobileasavalueplayratherthanagrowthstocknowadaysProfitabilityConflictofinterestgovernmentneedstostrikeabalancebetweenmaximisingtaxrevenueandloweringpricestoboostaffordabilityandpenetrationImportantacriterionofmanagementevaluationImportantRevenueNotasimportantasprofitNotasimportantasprofitempirebuildingandoveremphasisonFortunerankingsarerisksNotasimportantasprofitNetworkqualityImportantImportantacriterionofmanagementevaluationNotasimportantasprofitinvestorsfavourlowcapextosalesQualityofserviceImportantImportantacriterionofmanagementevaluationNotasimportantasprofitinvestorsfavourlowcapextosalesNationalsecurityImportantImportanttopmanagersareexMIIandmembersoftherulingpartyNotimportantNationalownershipImportantImportanttopmanagersareexMIIandmembersoftherulingpartyNotimportantSource:DeutscheBankAGestimates,CompanydataJulyTelecommunicationsFixedLineChinaTelecomSectorPageDeutscheBankAGAppendixImportantDisclosuresAdditionalinformationavailableuponrequestDisclosurechecklistCompanyTickerRecentpriceDisclosureChinaMobileHK,,,ChinaTelecomHKHK$,,,VodafoneVODLGBp,,,,,,SKTelecomKSKRW,,,,,ChinaUnicomACHRMBNAATTTNUS$,,,ChinaUnicomHKHK$,,Withinthepastyear,DeutscheBankandoritsaffiliate(s)hasmanagedorcomanagedapublicofferingforthiscompany,forwhichitreceivedfeesDeutscheBankandoritsaffiliate(s)makesamarketinsecuritiesissuedbythiscompanyDeutscheBankandoritsaffiliate(s)actsasacorporatebrokerorsponsortothiscompanyTheresearchanalyst(s)oranindividualwhoassistedinthepreparationofthisreport(oramemberofhisherhousehold)hasadirectownershippositioninsecuritiesissuedbythiscompanyorderivativesthereofTheresearchanalyst(or,intheUS,amemberofhisherhousehold)isanofficer,director,oradvisoryboardmemberofthiscompanyDeutscheBankandoritsaffiliate(s)ownsonepercentormoreofanyclassofcommonequitysecuritiesofthiscompanyDeutscheBankandoritsaffiliate(s)hasreceivedcompensationfromthiscompanyfortheprovisionofinvestmentbankingorfinancialadvisoryserviceswithinthepastyearDeutscheBankandoritsaffiliate(s)expectstoreceiveorintendstoseekcompensationforinvestmentbankingservicesfromthiscompanyinthenextthreemonthsDeutscheBankandoritsaffiliate(s)wasamemberofasyndicatewhichhasunderwritten,withinthelastfiveyears,thelastofferingofthiscompanyDeutscheBankandoritsaffiliate(s)holdsonepercentormoreofthesharecapitalofthecompanywhosesecuritiesaresubjectoftheresearch,calculatedundercomputationalmethodsrequiredbyGermanlaw(dataasofthelasttradingdayofthepastmonth)SeefootnoteheadedSpecialDisclosuresforanyotherrelevantdisclosuresDeutscheBankandoritsaffiliate(s)holdsanetshortpositionoformoreofthesharecapitalofthecompanywhosesecuritiesaresubjectoftheresearch,calculatedbymethodsrequiredbyGermanlawasofthelasttradingdayofthepastmonthDeutscheBankandoritsaffiliate(s)holdsatradingposition,asthattermisdefinedbyGermanlaw,insharesofthecompanywhosesecuritiesaresubjectoftheresearchDeutscheBankandoritsaffiliates(s)hasreceivednoninvestmentbankingrelatedcompensationfromthiscompanywithinthepastyearThiscompanyhasbeenaclientofDeutscheBankSecuritiesIncwithinthepastyear,duringwhichtimeitreceivednoninvestmentbankingsecuritiesrelatedservicesJulyTelecommunicationsFixedLineChinaTelecomSectorDeutscheBankAGPageFordisclosurespertainingtorecommendationsorestimatesmadeonsecuritiesotherthantheprimarysubjectofthisresearch,pleaseseethemostrecentlypublishedcompanyreportorvisitourglobaldisclosurelookuppageonourwebsiteathttp:equitiesresearchdbcomSpecialDisclosuresDeutscheBankAGandoranaffiliate(s)areactingasagentinrespectofVodafoneplc'songoingsharebuybackprogrammeAnalystCertificationTheviewsexpressedinthisreportaccuratelyreflectthepersonalviewsoftheundersignedleadanalyst(s)aboutthesubjectissuersandthesecuritiesofthoseissuersInaddition,theundersignedleadanalyst(s)hasnotandwillnotreceiveanyco

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德意志银行关于中国电信行业分析(英文)

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