China Telecom Sector: CM, CT run rate ahead, CU behind
- 5G sub net adds increased for CT and CU m-o-m while decreased for CM in Jun 2022
- CM and CT’s current monthly run rate for FY22 exceeded our estimation, while CU’s is below
- Stable market share in 5G sub market
- Maintain BUY calls on CM, CT and CU
What’s New
– China Mobile (CM, 941 HK), China Telecom (CT, 728 HK), and China Unicom (CU, 762 HK) released the monthly operating data of Jun 2022 on 20 Jul 2022 after market close.
– 5G sub net adds was 15.8m (-13.2% m-o-m), 7.2m (+2.0% m-o-m) and 5.2m (+5.6% m-o-m) for CM, CT and CU respectively. Market share remained stable in the 5G sub market in Jun 2022.
– CM’s total mobile sub slightly increased 3.3m to 969.9m and CT’s mobile sub increased by 3.1m to 384.2m.
– 5G penetration rate reached to 52.7% (+1.5ppts m-o-m) for CM and 60.3% (+1.4ppts m-o-m) for CT.
Our View:
– Overall, 5G net adds remained solid in Jun 2022. The average 5G sub net adds in 6M22 for CM (20.7m) and CT (7.3m) exceeded the monthly run-rate of our estimation of 15m and 6.7m respectively, while CU’s average of 5.0m per month is lower than our estimated 6.3m.
– Maintain BUY call on CT, CM, and CU on stable outlook and undemanding valuation.