Morgan Stanley: HKBN (01310) adjusted free cash flow in the second half of the year surpasses expectations, rated "in line with the market"

Morgan Stanley released a research report stating that HKBN (01310) saw a 13% year-on-year growth in service revenue, higher than Morgan Stanley's expected 8.4%, mainly due to a HK$360 million increase in IDD revenue, while SI revenue increased by 14% year-on-year. Adjusted EBITDA met Morgan Stanley's expectations, while adjusted free cash flow increased by 11% year-on-year to HK$551 million, higher than Morgan Stanley's expected 8%, due to lower interest costs. Morgan Stanley set a target price of HK$6.5 for HKBN, with a rating of "in line with the market". Morgan Stanley stated that Hong Kong Broadband has just completed a HK$10.7 billion debt refinancing, which will result in a one-time cost of HK$140 million, but interest costs should decrease.