UBS: Raises China Unicom's target price to 10.5 Hong Kong dollars and maintains "buy" rating.

UBS released a report stating that it has raised the target price for China Unicom from 8.3 Hong Kong dollars to 10.5 Hong Kong dollars, while maintaining a "buy" rating. The current stock price is equivalent to an estimated dividend yield of 6.8% for next year, higher than the historical average of 5.5%. The bank has lowered its capital expenditure assumptions for China Unicom from 10% to 15% for this year to 2027, and reduced the net profit forecast for the company by 3% to 5% for the next two years, reflecting increased investment in new businesses, partially offset by reduced depreciation. The bank anticipates an increase in China Unicom's long-term cash flow, with a 1 percentage point increase in cash - ROIC based on the transition of the business to new enterprise ventures. The bank has raised its service revenue forecasts for the company from 2021 to 2027 by 1% to 2.5%, assuming stronger growth in enterprise businesses.