Daily Investment Strategy
Recommended Stock：China Unicom (762)
In 3Q24, the Group's operating revenue amounted to RMB 290.12 billion, up by 3.0% yoy. EBITDA reached RMB 80.40 billion, up by 2.0% yoy. PBT reached RMB 23.55 billion. The profit attributable to the equity shareholders of the Company reached RMB 19.03 billion, up by 10.3% yoy, maintaining double-digit growth. Computing power services continue to grow, with Unicom Cloud revenue reaching RMB 43.86 billion, up by 19.5% yoy. By promoting the accelerated development of AIDC through the intelligent transformation of data centres, data centre revenue reached RMB 19.69 billion, up by 6.8% yoy. This quarter’s profit increased by more than 10%, but Unicom Cloud’s revenue growth continue to slow down. Considering the dividend yield of more than 7% in 2025, the stock remains attractive for dividend earning purpose. Investors can accumulate the stock using dollar-cost averaging method. Target price: $80; Stop- Loss price: $66.
NPC Standing Committee Announces Debt Restructuring Scale
After the NPC Standing Committee meeting, it was announced that a new debt limit of RMB 6 trillion has been approved specifically for handling local debt restructuring, to be released in batches over three years. Additionally, it was stated that in the next five years, RMB 800 billion will be allocated annually from new local government special bonds to replace RMB 4 trillion of implicit debt, totaling RMB 10 trillion in direct resources for local debt restructuring. Furthermore, the latest inflation data met expectations, rising by 0.3%. Core inflation increased by 0.2% year-on-year and remained flat month-on-month, while the Producer Price Index (PPI) continued to decline, falling by 2.9%.
On Friday, there was a net outflow of RMB 3.04 billion through the Stock Connect. Semiconductor Manufacturing International Corporation (981) saw the highest net inflow of 1.61 billion yuan, followed by Alibaba (9988). The largest net outflow was recorded by the Tracker Fund of Hong Kong (2800), with 6.42 billion yuan, followed by the CSOP Hang Seng Tech Index ETF (3033).
Wen Kit Kenny is a SFC licensed person accredited to KGI Group to carry on regulated activities (for details, please refer to:https://apps.sfc.hk/publicregWeb/indi/AJF244/details). He and/or his associate do not have any financial interest in the recommended issuer or new listing applicant.
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