China’s New Mobile Operator Has a Long Road Ahead; Chinese Telcos Still Looking Good Value

We retain our no-moat ratings for both China Unicom and China Telecom, but we increase our fair value estimates for China Unicom to HKD 10.50 from HKD 9.70 per share previously and for China Telecom to HKD 5.20 from HKD 4.80 per share. This is due to a stronger Chinese yuan. We also retain our narrow moat rating for China Mobile and increase our fair value estimate to HKD 96.30 from HKD 90 per share, also due to a stronger Chinese yuan.