2010年亞洲電信產(chǎn)業(yè)研究報告.doc

asia pan-asiatelecommunications2 july 2010asian telecoms sector half-time review in a challenging yearwilliam brattonresearch analyst (+852) 2203 6186 1h10 trends generally support our regional sector viewthe asian telco sector has had a relatively good 1h10 with strong performances in malaysia, china and thailand while the indian, philippine and indonesian telco sectors have performed the worst. we expect the key 1h10 themes (smartphones, competition and nbns) to persist into 2h10 and maintain our regional preferences. within the sector we recommend over-weighting china, indonesia, taiwan and thailand and under-weighting india, korea, malaysia and the philippines. our preferred telcos remain ais, cht, lgt, sth, tlkm and unicom.a relatively good 2010 first half for the asian telco sectorthe msci asia ex-jp telecom services index (mxasjtc) is up 3% over the lastsix months and has out-performed the msci asia ex-jp index (mxasj) by approx8%. nearly two-thirds of db covered telcos achieved absolute price gains and most db covered telcos out-performed their local benchmarks since end-2009.specifically, the best 1h10 performing sectors across the region in terms of totalmarket cap changes were malaysia (+9%) and china (+8%) while the worst wereindia (-12%), the philippines (-7%) and indonesia (-7%). the best performing telco was xl axiata while both axiata and pccw achieved 20% price gains over thelast six months. in contrast, during 1h10 tcnzs price fell 24% (close to 20yr lows), tata is down 22%, bharti lost 20% and telkom declined 19% (see insidefor 1h10 reviews for specific stocks).key 1h10 themes likely to persist into 2h101h10 sector themes were generally dominated by smartphones and mobile data(in korea, singapore and taiwan), competition trends (especially in india and thephilippines) and national broadband network developments (in australia, malaysia, new zealand and singapore). we expect these same issues to continue to dominate into 2h10. however, the actual impact of nbns on marketcompetition and structures is likely to become clearer (we believe concerns thatnbn will result in long-term structural changes are misplaced) while we also expect a greater understanding in 2h10 of the actual economics of mobile data(we think mobile data growth will not be as beneficial for telcos as often believed).however, although the sectors fundamental themes remain difficult, some markets and specific stocks still remain attractive. in addition, the sector maybenefit from general uncertainty given its underlying defensiveness.maintaining our regional sector preferences into 2h10our regional sector strategy is significantly influenced by competition trends. as aresult, although ytd trends have generally reflected our regional preferences, we maintain our recommended sector weightings into 2h10. specifically, werecommend investors stay or go overweight the chinese, indonesian, taiwan andthai telco sectors, and stay or go under-weight the indian, korean, malaysian andphilippine sectors. within this context, our regional top picks are ais, chunghwa, lgt, starhub, telkom and unicom. in particular, chunghwa is our regionally preferred defensive yield telco and we recommend both unicom and telkom forinvestors seeking exposure to the sectors increasingly rare growth opportunities.our standard valuation methodology is dcf analysis and key risks are competition, regulation and technology (see p17). see p15 for regional comps.industry update top picks ais (adva.bk),thb86.75 buy china unicom (0762.hk),hkd10.54 buy cht (2412.tw),twd64.20 buy lg telecom (032640.ks),krw7,740.00 buy telkom (tlkm.jk),idr7,700.00 buy companies featured ais (adva.bk),thb86.75 buy 2009a 2010e 2011e p/e (x) 14.6 13.6 14.1ev/ebitda (x) 5.6 5.6 6.1price/book (x) 3.6 4.5 4.5china unicom (0762.hk),hkd10.54 buy 2009a 2010e 2011e p/e (x) 21.4 30.2 22.0ev/ebitda (x) 4.6 5.0 4.7price/book (x) 1.0 1.0 1.0cht (2412.tw),twd64.20 buy 2009a 2010e 2011e p/e (x) 14.0 14.4 14.4ev/ebitda (x) 5.8 5.8 5.7price/book (x) 1.7 1.6 1.6lg telecom (032640.ks),krw7,740.00 buy 2009a 2010e 2011e p/e (x) 7.8 6.3 5.9ev/ebitda (x) 2.9 1.8 1.7price/book (x) 1.15 1.05 0.94starhub (star.si),sgd2.30 buy 2009a 2010e 2011e p/e (x) 11.0 13.9 12.8ev/ebitda (x) 6.4 7.6 7.2price/book (x) 29.3 59.4 121.2telkom (tlkm.jk),idr7,700.00 buy 2009a 2010e 2011e p/e (x) 14.6 12.4 11.4ev/ebitda (x) 5.1 4.5 4.1price/book (x) 4.78 2.98 2.60 related recent research dateasian telecoms: buy unicom & telkom for increasingly rare growthwilliam bratton 22 jun 2010asian telecoms: philippines outlook still tough but more positive on indonesiawilliam bratton 14 jun 2010asian telecoms: six telcos with potential to accelerate returnswilliam bratton 26 may 2010asian telecoms: key take-aways from our db accessasia expert speakerswilliam bratton 18 may 2010asian telecoms: where we are different fromconsensus and whywilliam bratton 27 apr 2010global markets researchcompanydeutsche bank ag/hong kongall prices are those current at the end of the previous trading session unless otherwise indicated. prices are sourced from local exchanges via reuters, bloomberg and other vendors. data is sourced from deutsche bank and subject companies. deutsche bank does and seeks to do business with companies covered in its research reports. thus, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. investors should consider this report as only a single factor in making their investment decision. disclosures and analyst certifications are located in appendix 1. mica(p) 007/05/20102 july 2010telecommunications asian telecoms sector1h10 in reviewfor a full comps table please turn to p15, for more details on relative price performance please refer to p16 and for an overview of the general sector valuation methodology and associated risks, please see p17.australia: nbn issues will continue to dominate into 2h10andrew anagnostellis (+61 2 8258 2218, )figure 1: relative price performance versus local benchmarks&p/asx 200 telstra1m chg -2.9% +10.2%3m chg -11.8% +8.3%6m chg -11.7% -5.2%12m chg +8.8% -3.0%note: until close 30th june 2010source: bloomberg finance llp, deutsche banktelstra has declined 5% year-to-date but this number disguises some significant price movements over recent months. for example, telstra had a relatively difficult start to the year falling 15% from end dec 09 through to its mar 2010 lows. much of this decline was in second half feb after it reported 1h10 results below expectations and on the back of news- flow about telstras potential separation. the stock subsequently remained constrained through to 25 may 2010 (when it hit a ten year a$2.89 low) but it has since rallied and is up approximately 12.5% subsequently on increased clarity on the relationship between telstra and nbnco (the company which will operate the national broadband network).specifically, in jun 2010, an agreement was proposed (subject to shareholder, regulatory and government approval) which would 1) pay telstra to decommission its copper network and deactivate its cable broadband service; 2) pay telstra a fee per subscriber migrated to the nbnco network; 3) give nbnco access to telstras network infrastructure (e.g. ducts) via long-term leasing; 4) allow telstra to bid for broadband wireless spectrum; and 5) reduce telstras universal service obligation (uso) commitment. in total, the deals value is estimated at a$11bn to telstra of which a$9bn comes from migration of its subscribers to the nbnco network and a$2bn from policy reforms (e.g. the reduced uso levy).what to watch for in 2h10there is one key issue in the australian telecom sector the national broadband network (nbn) and how it potentially impacts telstra. this should be the focus of attention over the next six months and increasing clarity / understanding on its impact will be a key driver of telstras price performance. in addition, however, it will be necessary to keep any eye on telstras underlying operational trends given the weak 1h10 and the challenging outlook. in fact, in the potential absence of any further specific developments on the nbn, we believe the focus could shift back towards the underlying operating conditions.regional sector view: still neutral on australia. telstra may offer a compelling yield (8.5% expected over next three years) but ongoing uncertainty over nbn impact prevents us from getting too excited.deutsche bank ag/hong kongpage 17china: one of the best performing telco sectors in 1h10alan hellawell (+852 2203 6240, )figure 2: relative price performance versus local benchmarkhsi cm ctcu1m chg +1.8% +7.0% +7.1% +11.3%3m chg -5.2% +3.5% -3.6% +19.2%6m chg -8.0% +7.3% +16.0% +2.5%12m chg +9.5% +0.8% -2.6% +2.7%note: until close 30th june 2010source: bloomberg finance llp, deutsche bankthe chinese telco sector has been one of the best performing ytd (second only to malaysia) with all three telcos outperforming the benchmark hsi index since end-2009. in part, we believe this relatively good performance reflects our previously highlighted view that competition was unlikely to be as severe as earlier feared (see china unicom: benefiting from a new competitive thesis, u/g to buy, 26 feb 2010) which prompted us to upgrade our china weighting within the regional sector context from under-weight to over-weight (see asian telecoms: going positive on china but more cautious on indonesia, 26 feb 2010).china telecom experienced the best 1h10 price performance (+16.0%) among the three operators as it continued to make very steady progress in both its fixed line and mobile businesses. for example, the companys mobile division has achieved solid net adds through 1h10 (averaging 3m each month), while the broadband division also gained traction (averaging 800k net adds per month). in addition, the bundling of fixed line voice with broadband has slowed the migration of fixed voice subscribers to competitors.china mobile has been generally range-bound over the last six months. the company still has the largest share of chinas net adds, averaging over 5m per month, is still generating substantial cash and has been substantially de-rated over recent years (currently trading at11.8x forward earnings). as a result, we recently upgraded china mobile to buy (see china mobile: slimming subsidies, cutting capex, upgrade to buy, 31 may 2010). in addition, although its use of td-scdma technology remains an over-hang, the company is now promoting td as a “fixed wireless terminal” a strategy which may reduce concerns over the relevance of the td technology.china unicom underperformed the other two players on lackluster net adds through to apr2010. in may, however, the company intensified its acquisition efforts by expanding its promotional offers such as greater iphone subsidies and the introduction of the increasingly popular lenovo lephone. the resulting recovery in may net adds suggests initial success (3g net adds for may exceeded 1m, an increase of 50% over aprils net adds) and has resulted in a 10% price gain since unicom announced its may net adds (see china unicom: an encouraging month, 18 jun 2010). we expect gradual mom growth in unicom net adds over 2h10 and into 2011e and as a result, unicom remains our preferred chinese telco and one of our regional top picks (especially for investors still seeking growth).what to watch for in 2h10 competition: with unicom increasingly aggressive in its promotion of its wcdma services through subsidies and potential tariff cuts, it is possible that both mobile and telecom may be forced to respond if unicom gains significant traction. capex increase: it is possible capex may not fall as much as earlier anticipated as operators may focus on increasing network capacity to support fixed and mobile broadband services. china mobiles expansion into fixed line: if china mobile aggressively positions itself in the fixed line sector then it is possible that its move may impact both telecoms and unicoms existing fixed line businesses.regional sector view: still our preferred growth market and from a regional sector perspective we recommend over-weighting china especially as we expect competition to remain benign. we have buys on all three chinese telcos but china unicom remains preferred and it is one of our regional top picks especially as we expect further evidence through 2010 of improved operational performance.hong kong: a quiet 1h10 and no change expected in 2h10william bratton (+852 2203 6186, )figure 3: relative price performance versus local benchmarkhsi pccw1m chg +1.8% +7.5%3m chg -5.2% -0.9%6m chg -8.0% +21.9%12m chg +9.5% +12.9%note: until close 30th june 2010source: bloomberg finance llp, deutsche bankthe only 1h10 event in hks telecom sector of any note was the successful privatisation of htil by hutchison whampoa (13 hk, buy, hk$48.9). otherwise, competition trends have stayed benign and there have been no significant regulatory developments. within this stable environment, pccw has been one of the best performing telcos across the sector with a 22% price gain over the period despite no obvious catalyst and despite the street still being generally cautious on the company (6 sells, 2 holds and 3 buys). nevertheless, we still like pccw and recommend buy with a hk$2.90 target versus hk$2.28 last close.what to watch for in 2h10it is difficult to identify a particular potential 2h10 event or trend to highlight. we still believe competition trends should remain benign while there are no obvious regulatory changes scheduled over the next six months one of the reasons we still like hk from a regional sector perspective and recommend an over-weight stance.regional sector view: it may be a small market with pccw the only remaining listed telco of any particular size, but given our positive view on pccw and our expectations that competition will remain subdued and regulatory developments predictable, we recommend over-weighting