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DBS: China Unicom Hong Kong Ltd – Buy Target Price HK$6.80

News Alert: China Unicom (762 HK) has received approval from MIIT to refarm 900MHz frequency for 5G network

What’s New

– China Unicom (762 HK) announced that MIIT has approved the refarming of the 900MHz frequency resources for 5G systems (previously used for 2/3/4G systems), according to HKEx yesterday after market close.

– This marks the first MIIT approval regarding low-band 5G spectrum development in China.

– The 900MHz frequency band has features including less transmission loss, wide coverage, strong penetration and low network deployment cost.

– This allows China Unicom to expand its 5G coverage into rural and remote areas with less investment.

– Earlier this year, China Mobile and CBN also announced a strategic cooperation agreement to construct and share a 700MHz 5G network, another 5G low-band network development in China.

Our View:

– The news is positive to China Unicom.

– The company can deploy 5G coverage faster and at a lower cost.

– We currently rate BUY on the counter with TP of HK$6.8.

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