HK Stock Market Move | China United Network Communications (00762) fell more than 4% in the afternoon, Nomura said that its core and emerging businesses are facing pressure, and downgraded its future revenue and profit forecasts.

China United Network Communications (00762) fell more than 4% in the afternoon, dropping by 4.01% to 6.95 Hong Kong dollars with a trading volume of 304 million Hong Kong dollars as of the time of writing. Nomura released a research report stating that it has lowered the target price of China United Network Communications from 7 Hong Kong dollars to 6.9 Hong Kong dollars, a decrease of 1.4%, while maintaining a "neutral" rating. The bank believes that the company's core and emerging business growth are facing pressure, leading to a 1-2% decrease in revenue forecasts for fiscal years 2024-26 and a 2-4% decrease in profit forecasts to reflect weakening market demand and competitive pressure from the consumer market. Nomura also believes that the company's industrial Internet business may face a slowdown in revenue growth for the fiscal year 2024 due to the impact of economic growth. Additionally, the company's expansion into digital businesses for government and corporate clients may have adverse effects on accounts receivable, leading to a slowdown in cash flow growth. China United Network Communications announced an extension of the depreciation period for some assets on October 24, with Nomura estimating that this move will reduce depreciation costs by 1.1-1.2 billion Chinese yuan and drive a 10% increase in profit for the fiscal year 2024.