Goldman Sachs: CHINA UNICOM (00762) Maintains Robust Dividend Growth, Keeps "Buy" Rating

Stock News
Aug 19

Goldman Sachs released a research report stating that CHINA UNICOM (00762) interim results showed revenue growth, cash flow and profitability challenges, but dividend growth remained robust. The company's interim dividend per share increased 14.5% year-on-year, with the payout ratio rising 5 percentage points compared to the same period last year. The investment bank believes Chinese telecom stocks have become a primary high-yield return option for local investors, and the stable dividend capability and willingness to increase dividends of Chinese telecom stocks will be key factors driving share prices. Goldman Sachs maintains its "Buy" rating on CHINA UNICOM and raised its target price from HK$10.4 to HK$11.2. The firm expects that the increase in accounts receivable that led to higher bad debt provisions in the first half will improve in the second half, thereby alleviating profit pressure. Goldman Sachs slightly lowered its forecasts for the coming years to reflect slower cloud business revenue growth, with revenue forecasts for 2025-2027 reduced by 1.1% to 3.6%, and EBITDA forecasts lowered by 0.9% to 2.8%.

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