HK Stock Market Move | Telecom stocks collectively fell back, with China United Network Communications (00762) dropping more than 5% and China Telecom Corporation (00728) dropping more than 4%.

Telecom stocks collectively fell back. As of the time of publication, China United Network Communications (00762) fell by 5.04% to HK$9.43; China Telecom Corporation (00728) fell by 4.35% to HK$5.94; China Mobile Limited (00941) fell by 0.66% to HK$83. Previously, Lyon released a research report stating that some investors are worried about a possible price war in the mainland cloud market this year, as well as whether ByteDance's VolcanoEngine will be a factor triggering the price war. The bank predicts that there will not be an extreme price war in the mainland cloud market in the short term, as all mainland network cloud providers have experienced two years of losses or reduced low-profit business. UBS also stated that telecom operators are beneficiaries of AI capital expenditure and increasing demand. Among the three major Chinese telecom operators, China Telecom Corporation has the highest service revenue exposure in the cloud and data center, accounting for 20%, while China Mobile Limited and Unicom account for 12% to 13% each. The bank believes that telecom stocks' capital expenditure increase risk is controllable, with China Mobile's 5G capital expenditure portfolio being the highest, and believes that its capital expenditure or free cash flow is most defensive amid the growth in artificial intelligence capital expenditure.