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<Research>JPM: 3 Big Telecoms Have AI Upside Potential; Top Pick CHINA TELECOM (00728.HK)
Recommend 14 Positive 17 Negative 10 |
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The share prices of Chinese telecom operators outperformed the HSI from 2019 to 2024, with a double-digit gap, and outpaced the market YTD, JPMorgan released a research report saying. The broker noted that the big 3 telecoms are not only providers of attractive dividend yields, but are also growth companies with AI potential upside. JPMorgan believed that the rise of AI and DeepSeek in China may reignite revenue growth in cloud computing and AI data centers, further enhancing valuations. It is estimated that the current stock prices of CHINA MOBILE (00941.HK), CHINA UNICOM (00762.HK) and CHINA TELECOM (00728.HK) may have an additional upside potential of 11-95%. Among the big 3 telecoms, the broker preferred CHINA TELECOM, as it has the largest cloud platform among the three operators and is expected to benefit the most from the AI theme in China, leading to a revaluation and growth in its cloud computing business, followed by CHINA UNICOM and CHINA MOBILE. Although JPMorgan rated the A-shares of the big 3 telecoms at Overweight, it preferred their H-shares to A-shares due to a 29-35% discount in trading prices compared to A-shares. AASTOCKS Financial News Website: www.aastocks.com |
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