Good Times Keep Rolling For China Cellular Operator Unicom (CHU, rated BUY)
Posted on August 25, 2007 at 01:18 AM EDT
The American Depository Shares of mainland Chinese cellular operator China Unicom ( CHU ) are up 5% at $18.00 today after the company reported a 5% rise in sales for the six-month period ended June 30. And Lehman Brothers analyst Paul Wuh expects the good times to keep on rolling. “China Unicom will continue to benefit from strong subscriber growth given China’s relatively low wireless penetration (38%) and the trend of fixed to wireless substitution,” he writes in a note today. Wuh has an Overweight rating on China Unicom’s ordinary shares and a price target on those shares of 15.60 Hong Kong dollars. Interestingly, the company’s EBTIDA rose 8%, faster than sales, even though average revenue per user declined in both the company’s GSM subscribers and its CDMA subscribers. China Unicom’s making it up on volume, I guess. Things haven’t been great for every firm in the Chinese market, as I noted on Tuesday with respect to mobile phone content vendor KongZong ( KONG ).
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