On Mar 5, 2014, we issued an updated research report on
China Unicom Hong Kong Limited
) - the second largest wireless operator in China. The company
posted strong 2013 results with both top and bottom lines
improving year over year on strong contribution from its 3G and
broadband businesses. CHU currently carries a Zacks Rank #3
China Unicom has achieved a leading position in 3G and integrated
innovation, and plans to focus on growth and efficiency over the
next few years. The company remains committed tofaster broadband
network, improve service quality and offer bundled services.
China Unicom expanded its 3G base stations by 76,000 to 407,000
in 2013 to improve its network.
The company recently won the LTE-TDD (Time Division Duplex)
license. However, China Unicom wants to focus on the globally
accepted FDD (Frequency Division Duplex) technology and aims to
provide 4G service by the end of 2014. The company plans to
invest $1.65 billion (RMB 10 billion) with the majority of the
amount dedicated toward W-CDMA and HSDPA upgrade, which will
provide a solid base for its 4G mobile broadband rollout.
China Unicom continues to operate in a competitive landscape,
which keeps its GSM ARPU under pressure due to an aggressive
price war. Apart from 3G, the competition has intensified under
pressure due to aggressive price.
China Mobile Ltd
) is a leader in 4G deployment and is expected to install 500,000
base stations in 2014, while
China Telecom Corp.
) aims to establish 60,000 base stations by 2014. China Unicom
lags both with only 50,000 base station deployments, which could
affect its market share gains in the 4G space.
Key Pick from the Sector
A better-ranked stock within the industry is
SK Telecom Corp Ltd
). SKM currently carries a Zacks Rank #1 (Strong Buy).
CHINA TELCM-ADR (CHA): Free Stock Analysis
CHINA MOBLE-ADR (CHL): Free Stock Analysis
CHINA UNICOM (CHU): Free Stock Analysis
SK TELECOM CO (SKM): Free Stock Analysis
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