reports
- Chris Hoare
- Chris Hoare
Chinese Telcos Q4 23 review: Outperformance by China Telecom; bullish...
China Telecom was the clear outperformer for service revenue growth this quarter and for the full year too, driven by an acceleration in Enterprise. Industry EBITDA trend was less upbeat in Q4 as China Mobile and Unicom declined. Both capex and dividend guidance were bullish; industry capex expected to lower by 5% while payout is expected to trend above 75% over the next three years (by 2026) for China Mobile and China Telecom.
- Chris Hoare
Chinese Telcos & Towers Outlook 2024 – Expect another good year for t...
2023 was another decent year for the telcos largely driven by Enterprise. Stocks (especially China Mobile and Telecom) outperformed the weak local index. We expect trends to last through 2024 with good revenue growth and reducing margin pressure and the potential for shareholder remuneration to surprise
- Chris Hoare
- David Lopes
- Chris Hoare
EM Telcos Q2 23: Slightly slower driven by China
EM Telcos top line growth slowed somewhat in Q2 again driven by a slower quarter in China. However, other markets stayed strong and simple average revenue growth was 8.5%. Our thesis remains that EM telcos are set to grow sustainably at GDP+ rates, as they have been now for 3 years. With the rates cycle seemingly peaking, macro headwinds may also start to improve, and we continue to believe that EM Telcos are still not in our view priced for mid-term GDP+ growth, and rising returns.
- Chris Hoare
Chinese Telcos Q2 23 review: Better EBITDA; Enterprise continue to dr...
Chinese operators slowed to 5% service revenue growth, with the slowdown in mobile and broadband only partially offset by enterprise growth. Importantly, shareholder remuneration were encouraging as interim dividends grew 10%/19%/23% YoY for CM, CT and CU respectively.
- Chris Hoare
GEM Telcos Are the price wars finally over?
For 15 years, EM Telcos were engaged in a war for market share, with price the primary weapon. But peace is now breaking out globally. Mobile prices are rising across global EM (India, Brazil, Indonesia, Thailand among others). In this note, we analyze which markets have the greatest potential for recovery, based on 3 criteria: affordability, market structure and challenger returns.
- Chris Hoare
Chinese Telcos Q1 23 review: Growth sustained by better mobile and co...
Chinese operators sustained another round of 7-8% service revenue growth, supported by improvements in mobile and continued strength in Enterprise. Given the growth in absolute incremental Enterprise revenue, Enterprise service revenue contribution has now exceeded fixed line.
- Chris Hoare
Asian Telcos 5G capex has peaked in Asian Mobile Leaders
We analyse the capex outlook for Asian Mobile Leaders (Japan, Korea, China, Singapore). Conclusions are bullish: Capital intensity has improved materially and this alongside margin stability and better revenue growth completes the positive picture. ROIC, cash flow, and shareholder returns are all upgraded. From a stock perspective, we think China is the canary in the coal mine. Telcos there are surging having been in this environment for 2 years.
- Chris Hoare
- David Lopes
- Chris Hoare
EM Telcos Q4 22: Double digit growth persists
EM Telcos continue to grow ahead of expectations as a group, and remain resilient to inflationary cost pressures on consumers, with growth in Q4 remaining strong for the leading telcos we track. Our thesis remains that EM telcos are set to grow sustainably at GDP+ rates.
- Chris Hoare
- Chris Hoare
- David Lopes
Chinese Telcos Showing the path for the rest of EM
Chinese Telcos have seen growth and return on capital inflect. Shareholder remuneration is improving. Despite a big rally recently, we see the sector doubling in value in coming years, but more importantly for those who cannot invest in the sector, we think Chinese Telcos are leading indicators of what is set to happen in the rest of EM.
- Chris Hoare
- David Lopes
New Street: Chinese Telcos & Towers Outlook 2023: Expect another good...
2022 was a good year for the telcos largely driven by Enterprise. We expect trends to last through 2023 with high single digit revenue growth though some near-term margin pressure is expected. Shareholder remuneration is guided to improve. We remain Buyers of all 3. China Tower should also do well in 2023 we think given more certainty following the new contract.
- Chris Hoare
- David Lopes
New Street: EM Telcos Q3 22 Enterprise review: Onboard the Enterprise...
Enterprise remains as the fastest driver for most EM Telcos and is set to exceed expectations based on our view that Enterprise penetration is following an S-curve. For nascent markets (India, Latam, Thailand), acceleration is the theme; while more mature markets like China are still riding on the double-digit trend. We see China as the leading indicator as to how Enterprise revenue might trend for EM telcos. In this note, we pull together actual Enterprise revenue trends as reported by EM Telco...
- Chris Hoare
- David Lopes
- Chris Hoare
New Street: Chinese Telcos Q3 22 review: High-single digit growth aga...
Chinese telcos reported high-single digit service revenue growth again, driven by Enterprise and a better mobile performance. However, EBITDA growth and margin saw some pressure, attributed to higher personnel, marketing costs and Enterprise-related technical costs.
- Chris Hoare
- David Lopes
New Street: EM Telcos Q2 Enterprise review; secular growth continues
We continue to see signs that Enterprise revenue growth is a secular growth driver for EM Telcos, leading to an improving top line outlook. We believe Enterprise revenues for EM Telcos are set to exceed expectations based on our view that Enterprise penetration is following an S-curve, as a wave of SMEs start the process of digitizing in Emerging Markets. In this note, we pull together actual Enterprise revenue trends as reported by EM Telcos up to Q2.
- Chris Hoare
New Street: EM Telcos Growth stays strong in Q2, despite fears over i...
Despite fears that EM ARPUs would be impacted by rising food and energy prices (which we always felt were overdone), growth in Q2 remained strong for the leading telcos we track. In fact, with Brazil the latest market to see growth improve (albeit remaining below local inflation), Q2 represented another quarter where a simple average of growth was above 10%. Our thesis remains that EM telcos are set to grow sustainably at GDP+ rates.
- Chris Hoare
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