AS telecommunications firms were the stars on the stock market this year, it has become almost the norm, and not news anymore, when Goldman Sachs or UBS raised their target price for China Mobile, again and again.
Investors should make China Mobile their top stock choice, followed by Hong Kong-listed China Unicom, Shanghai-listed China Unicom, China Netcom and Hong Kong-listed China Telecom, according to Tebon Securities.
Haitong Securities preferred dual-listed China Unicom and considered it more attractive than the bigger China Mobile.
Shares of the telecom carriers are rated either "Buy" or "Add." On the domestic stock market, major listed telecom firms include China Unicom and ZTE Corp.
The industry is also expected to undergo a restructuring, telecom observers said, with speculation that China Unicom will be more affected.
In 2008, investors can expect a flood of domestic initial public offerings. Part of the IPOs will be done by "Haigui" firms - the return of giants listed overseas now, including China Mobile and China Telecom.
"I will use all my savings to buy China Mobile's A-shares even if they are above 200 yuan on the first trading day," said an official at a top telecom equipment and handset vendor.
Below are the major listed telecom companies:
China Mobile (0941 HK):
The telco, which attracted 6.5 million new subscribers in November, added on average 4.5 million users monthly last year.
China Mobile has penetrated the rural areas and the telco is expected to maintain a high growth rate until 2010, according to KGI.
Shares of China Mobile will continue to grow 20 percent to 50 percent next year, according to Tebon Securities.
China Unicom (0762 HK) (stock code: 600050):
China Unicom, which added 1.39 million users last month, has seen its GSM (global system for mobile communications) business grow rapidly while its CDMA (code division multiple access) income has sustained a steady rise, according to Haitong. The broker expects the smaller mobile carrier to be more affected in an industry restructuring.
Shares of Hong Kong-listed China Unicom are more attractive than its domestically-listed shares because the former are undervalued about 50 percent of the Shanghai-listed shares, according to Tebon Securities.
China Telecom (0728 HK)
China Telecom's user base dropped at a record pace in October as the telco's Little Smart business declined and also on the introduction of free incoming calls by mobile phone carriers. However, the telco's broadband business is expanding steadily.
China Telecom's growth will slow but its future may be potentially good because it may be granted a mobile phone license, may launch a domestic IPO and it can ride on the boom in Internet TV, said KGI.
China Netcom (0906)
The same reasons for China Telecom's fall in business will also hit China Netcom, the smallest firm out of the big four. But Netcom's base of broadband users, however, jumped rapidly and growth in this area will continue at least until the Beijing Olympics.
China Netcom will be the biggest winner in any industry restructuring, according to Haitong Securities.
ZTE (0763 HK) (stock code: 000063)
ZTE is the No. 1 public telecom equipment maker in China and is able to challenge Ericsson, Nokia and Siemens globally as it has won orders from carriers in western and developing countries.
ZTE is the biggest winner of China Mobile's recent 3G network tender.