Investment Rating - The report assigns a "Buy" rating to China Mobile with a target price of HKD 108, representing a potential upside of 35% from the current stock price of HKD 79 [4][6]. Core Insights - China Mobile's operational performance shows steady progress, with a record high dividend payout ratio of 75% for 2025, despite a slight decline in net profit [6]. - The company reported total operating revenue of CNY 1,050.2 billion for 2025, reflecting a year-on-year increase of 0.9%, while net profit was CNY 137.1 billion, a nominal decrease of 0.9% [6]. - The report highlights the ongoing optimization of the company's three main business segments, with communication services accounting for 79.8% of total revenue [6]. Financial Performance Summary - **Revenue and Profitability**: - Operating revenue for 2025 is projected at CNY 1,050.2 billion, with a slight increase of 0.9% year-on-year. The main business revenue is expected to be CNY 895.5 billion, up 0.7% [5][6]. - Net profit is forecasted at CNY 137.1 billion, with an EPS of HKD 7.20, reflecting a decrease of 1.7% [5][6]. - EBITDA is expected to reach CNY 338.9 billion, with an EBITDA margin of 32.3%, an increase of 0.2 percentage points year-on-year [6]. - **Capital Expenditure**: - The company plans to spend CNY 150.9 billion on capital expenditures in 2025, a decrease of 8% from the previous year [6]. - For 2026, capital expenditure is projected to be approximately CNY 136.6 billion [6]. - **Dividend Policy**: - The dividend per share for 2025 is set at HKD 5.27, a year-on-year increase of 3.5%, with a payout ratio of 75% [6][16]. Business Segment Performance - **Communication Services**: - Revenue from communication services is expected to be CNY 714.9 billion, down 1% year-on-year, accounting for 79.8% of total revenue [6]. - The mobile customer base reached 1.005 billion, with 642 million 5G customers, reflecting a penetration rate of 63.9% [6]. - **Computing and Intelligent Services**: - Revenue from computing services is projected at CNY 89.8 billion, with a growth rate of 11.1%, while intelligent services revenue is expected to be CNY 90.8 billion, growing by 5.3% [6]. - The report notes significant growth in AI-driven services, with a 279% increase in intelligent computing services [6]. - **International Business Expansion**: - International revenue is expected to grow by 28.5% year-on-year, driven by the expansion of global data centers and partnerships [6].

Investment Rating - The report maintains a "Buy" rating for China Telecom with a target price of HKD 6.0, representing a potential upside of 26% from the current price of HKD 4.8 [2][5][7]. Core Insights - The company is transitioning towards a Token-based operational model in the AI era, with a continuous increase in dividend payout ratio, achieving a 75% payout rate ahead of the original 2026 target [3][7]. - Despite a stable revenue outlook, the company faced a decline in ARPU (Average Revenue Per User) for the first time in recent years, indicating pressure on core business segments [7]. - The company is diversifying its revenue streams, with significant growth in its data services and cloud business, particularly in the public cloud IaaS market [7]. - The report highlights the company's strategic shift from "cloud transformation" to "intelligent cloud services," integrating AI into traditional business operations to optimize costs and improve management [7]. Financial Summary - For the fiscal year ending December 31, 2025, the company reported total revenue of HKD 529.56 billion, with a net profit of HKD 33.19 billion, reflecting a year-on-year revenue growth of 0% and a slight decrease in net profit [6][7]. - The projected earnings per share (EPS) for 2026 is HKD 0.37, down from HKD 0.41 in 2025, indicating a 10.5% decline [6][7]. - The company’s capital expenditure for 2025 is estimated at HKD 804 billion, a decrease of 14.1% year-on-year, with a focus on enhancing computing infrastructure [7]. - The dividend per share is projected to be HKD 0.28 for 2026, with a dividend yield of 5.8% [6][7]. Operational Metrics - As of the end of 2025, the mobile user base reached 439 million, with 302 million 5G users, representing a penetration rate of 68.8% [7][16]. - The mobile ARPU decreased to HKD 45.1, down 1.1% year-on-year, while the broadband ARPU also saw a decline to HKD 47.1 [7][16]. - The company’s cloud revenue reached HKD 1.207 billion, with a year-on-year growth of 6.8%, solidifying its position as the second-largest player in the public cloud IaaS market in China [7].

Investment Rating - The report maintains a "Buy" rating for China Unicom with a target price of HKD 10.0, representing a potential upside of 39% from the current price of HKD 7.3 [6][7]. Core Insights - Traditional communication services are under pressure, but cost reduction and efficiency improvements are mitigating the impact of VAT reforms. The company is transitioning from a traditional operator to a digital technology leader, entering a phase of high-quality development [7]. - The company reported a slight increase in revenue for 2025, with total revenue projected at RMB 392.2 billion, reflecting a year-on-year growth of 0.7%. Service revenue is expected to be RMB 347.7 billion, up 0.5% year-on-year [4][7]. - The company’s net profit for 2025 is projected at RMB 20.8 billion, a 1.0% increase from the previous year, with earnings per share (EPS) expected to be HKD 0.77 [4][7]. Financial Performance Summary - Revenue and profit growth are slowing, with operating income for 2025 expected to be RMB 392.2 billion, a modest increase from RMB 389.6 billion in 2024. The EBITDA margin is projected to remain stable around 25.3% [11][12]. - The company’s capital expenditure is planned to decrease to RMB 500 billion in 2026, with a focus on enhancing quality and efficiency, particularly in computing power investments [7][11]. - Free cash flow is expected to improve significantly, reaching RMB 360 billion in 2025, a year-on-year increase of 28.5% [7][11]. Business Segment Insights - The traditional core business is evolving towards scenario-based and value-added services, with a total connection scale exceeding 1.25 billion. The number of mobile and broadband users has surpassed 480 million [7]. - The company has made significant strides in its digital innovation business, with strategic emerging industries accounting for over 86% of revenue. AI revenue has grown over 140% year-on-year, becoming a core growth driver [7]. - International business revenue is projected to reach RMB 136 billion in 2025, reflecting a year-on-year growth of 9.2%, with multiple benchmark projects established in regions such as ASEAN, the Middle East, and Europe [7].

Group 1: Li Ning Company Analysis - Li Ning's revenue for 2025 is projected at RMB 29.59 billion, a year-on-year increase of 3.2%[5] - The company's gross profit margin decreased by 0.4 percentage points to 49.0% due to increased discounts and a lower proportion of self-operated channel revenue[5] - Operating profit increased by 6.0% to RMB 3.89 billion, while net profit decreased by 2.6% to RMB 2.94 billion[5] - The target price for Li Ning is set at HKD 24.64, reflecting an 18x multiple of the 2026 earnings per share (EPS) forecast[8] Group 2: China Unicom Analysis - China Unicom's revenue for 2025 is expected to be RMB 392.2 billion, with a slight year-on-year growth of 0.7%[14] - The company reported a net profit of RMB 20.82 billion, reflecting a 1.0% increase year-on-year[14] - Capital expenditure for 2025 is projected at RMB 54.2 billion, decreasing to RMB 50 billion in 2026, with a focus on enhancing computing power investments[14] - The target price for China Unicom is revised to HKD 10.00, indicating a potential upside of 39%[17]

Group 1 - Lianqi Technology (澜起科技) debuted on the Hong Kong Stock Exchange on February 9, 2023, with a closing price of HKD 175 per share, marking a 63.72% increase on its first day of trading [1] - The company focuses on providing innovative, reliable, and high-efficiency interconnect solutions for cloud computing and AI infrastructure, with IPO proceeds aimed at R&D, commercialization, strategic investments, and general corporate purposes [1] - The strong market response reflects the company's technological barriers and the benefits of its sector, aligning with the demand for computing infrastructure upgrades [1] Group 2 - Tongcheng New Materials (彤程新材) has submitted a listing application to the Hong Kong Stock Exchange, with Cathay Pacific Securities as the exclusive sponsor [2] - The company is a leading comprehensive new materials service provider in China, focusing on advanced chemical products, including electronic materials and biodegradable materials [2] - The listing is expected to enhance R&D investment and global production capacity expansion, leveraging its first-mover advantage in domestic photolithography resin [2] Group 3 - China Nuclear International (中核国际) announced a positive earnings forecast, expecting revenue to reach at least HKD 2.46 billion and gross profit to increase to at least HKD 260 million in 2025 [3] - This represents a significant increase from the 2024 expected revenue of approximately HKD 1.841 billion and gross profit of HKD 234 million, driven by increased uranium trading volumes [3] - The company's growth is supported by its unique position within the China National Nuclear Corporation and the rigid demand from domestic nuclear power expansion [3] Group 4 - Hong Kong Telecommunications (香港电讯) reported a 5% year-on-year increase in total revenue for 2025, reaching HKD 36.553 billion [4] - EBITDA grew by 4% to HKD 14.234 billion, while profit attributable to shareholders increased by 4% to HKD 5.286 billion [4] - The steady growth is attributed to robust performance in 5G and data services, reinforcing its position as a leading utility provider in Hong Kong [4] Group 5 - The Hang Seng Index closed at 27,027.16, up 1.76% on February 9, 2023 [5] - The Hang Seng Tech Index rose by 1.34% to 5,417.60, while the Hang Seng Composite Index increased by 1.52% to 9,168.33 [5]

Core Viewpoint - Hong Kong Telecommunications-SS (06823) reported a 5% year-on-year increase in total revenue to HKD 36.553 billion for 2025, with attributable profit to shareholders rising by 4% to HKD 5.286 billion [1] Revenue Breakdown - Local data service revenue grew by 6% to HKD 14.31 billion, driving local telecommunications service revenue up by 3% to HKD 17.785 billion, with local data services accounting for 80% of total revenue [1] - Pay television services generated revenue of HKD 2.264 billion, while local telephone services contributed HKD 1.8 billion [1] - International telecommunications service revenue also increased by 3% to HKD 7.343 billion, leading to a total telecommunications service revenue rise of 3% to HKD 25.128 billion [1] Mobile Communications Growth - The mobile communications business continued to grow, with service revenue increasing by 5% to HKD 9.157 billion, driven by the growth in roaming services, expansion of the 5G postpaid customer base, and rising demand for mobile communications enterprise solutions [1]

Market Overview - The Hang Seng Index closed at 26,835 points, up 0.2%, while the Hang Seng China Enterprises Index closed at 9,053 points, down 0.3%[1] - Total turnover in the Hong Kong stock market was HKD 335.2 billion, a decrease of 3.7% from the previous day's HKD 347.9 billion[1] - Sector performance varied, with materials, conglomerates, and industrial indices rising by 4.4%, 2.9%, and 2.8% respectively, while information technology, consumer discretionary, and telecommunications fell by 1.7%, 0.6%, and 0.1% respectively[1] Stock Performance - Leading blue-chip stocks included CSPC Pharmaceutical (1093 HK) and New Oriental (9901 HK), which rose by 8.1% and 6.4% respectively[1] - Kuaishou (1024 HK) and Baidu Group (9888 HK) were among the biggest losers, falling by 4.6% and 3.6% respectively[1] Industry Dynamics - The automotive sector is projected to see China National Heavy Duty Truck Group's total sales reach 450,000 units in 2025, a year-on-year increase of 25%[4] - The company expects to maintain a 39% market share, with heavy truck sales exceeding 300,000 units, leading global sales rankings[4] - The new energy heavy truck segment is anticipated to grow explosively, with a year-on-year increase of 230% expected in 2025[4] Pharmaceutical Sector - The pharmaceutical sector saw significant gains, with Insilico Medicine (3696 HK) surging 14.5% after announcing a milestone payment of HKD 39 million for a clinical trial[5] - The total collaboration agreement for the project is valued at USD 550 million, indicating potential for further milestone revenues as trials progress[5] Macro Economic Indicators - Hong Kong's retail sales in December 2025 increased by 6.6% year-on-year, slightly higher than the 6.5% increase in November[3] - South Korea's January CPI rose by 2.0%, lower than the 2.3% in December and below market expectations of 2.1%[3]

Group 1 - The Hong Kong telecommunications service market experienced a collective decline, with China Unicom falling over 10%, China Telecom dropping over 8%, and China Mobile decreasing over 4% [1][5]. - The total market capitalization of the telecommunications sector is approximately 3.96 trillion [2]. - The trading volume for the sector was 1.46 billion, with a total transaction amount of 22.83 billion [2]. Group 2 - A recent announcement from the Ministry of Finance and the State Taxation Administration stated that starting January 1, 2026, the tax category for services such as mobile data, SMS, and internet broadband will change from value-added telecommunications services to basic telecommunications services, with the VAT rate increasing from 6% to 9% [7].

Core Viewpoint - Guosheng Securities has initiated coverage on First Pacific with a "Buy" rating, forecasting steady growth in net profit from 2025 to 2027, which is expected to reach $649 million, $708 million, and $767 million respectively, with year-on-year growth rates of 8.2%, 8.9%, and 8.4% [1] Financial Performance - Revenue for 2023 is projected at $10,511 million, with a decline to $10,057 million in 2024, followed by a recovery to $10,585 million in 2025, and further growth to $11,220 million in 2026 and $11,958 million in 2027 [2] - Net profit for 2023 is estimated at $501 million, increasing to $600 million in 2024, and continuing to grow to $649 million in 2025, $708 million in 2026, and $767 million in 2027, with year-on-year growth rates of 28.0%, 19.8%, 8.2%, 8.9%, and 8.4% respectively [2] - The latest diluted EPS is projected to rise from $0.12 in 2023 to $0.18 in 2027, while the return on equity is expected to remain stable around 13.6% to 15.3% over the forecast period [2] Business Segments and Growth Drivers - First Pacific has established a diversified business portfolio in consumer food, telecommunications, infrastructure, and natural resources, focusing on key markets like Indonesia and the Philippines [3] - The consumer food segment, particularly through Indofood, is a significant profit driver, contributing $333 million in profit in 2024, which is 42.92% of total profit [6] - The infrastructure segment, led by MPIC, is emerging as a new growth engine, contributing $199 million in profit in 2024, with a 24.78% year-on-year increase [6] - The telecommunications segment, through PLDT, continues to provide stable revenue, while the natural resources segment is positioned to benefit from the strong cycle of non-ferrous metals [7] Strategic Positioning and Market Opportunities - First Pacific's deep engagement in emerging markets like Southeast Asia allows it to capitalize on demographic dividends and consumption upgrades [9] - The company is enhancing its infrastructure capabilities, with MPIC's privatization increasing control over the segment, and expanding its toll road network in Indonesia [10] - The natural resources segment is set to benefit from the strong pricing of gold and copper, with the Silangan project expected to start production in Q1 2026 [10] Valuation and Investment Outlook - According to Guosheng Securities, First Pacific's P/E ratio is projected to be around 5.1 times in 2025, significantly lower than the average P/E ratio of comparable companies at 15.7 times, indicating substantial valuation upside [10][11] - The company's robust profitability and clear growth trajectory are seen as rare strengths in the current market environment, justifying the "Buy" rating [12]

Core Viewpoint - The company has acknowledged recent media reports regarding the potential independent listing of its global telecommunications assets and its health and beauty products business, as well as possible transactions involving its telecommunications assets in several European countries. The board has not made any decisions regarding these potential transactions as of the announcement date [1][5]. Group 1 - The company is exploring opportunities to enhance long-term shareholder value, which may include potential transactions related to its assets and businesses, including independent listings [1][5]. - As of the announcement date, the board has not made any decisions regarding transactions involving existing telecommunications or retail assets and businesses [1][5]. - Shareholders and potential investors are advised that it is currently uncertain whether any such transactions will occur [1][5]. Group 2 - The latest stock price of the company is reported at HKD 61.35 per share, with a total market capitalization of HKD 235 billion [3][7].