ZTE-A and -H:Caution,speed bump ahead;initiating ZTE-H with Hold,ZTE-A with Sell
Leverage to 5G and market share gains mostly priced in. ZTE is well leveraged to grow ...
Leverage to 5G and market share gains mostly priced in. ZTE is well leveraged to grow in telco capex from 5G build-out starting in 2020. That said, current global appetite for large 5G capex is limited; while there isstronger political support for 5G tech in China, with limited applicationopportunities, we expect Chinese telcos to tread a middle path in the 5G buildout. Short term, global telco capex is set to fall 5-7% p.a., although ZTE'scompetitors struggle with profitability, providing some room for share gains. With ZTE's share price doubling YTD against a tough market backdrop, upsidepotential appears mostly priced in; Hold ZTE-H and Sell ZTE-A. Limited applications to support a widespread 5G rollout. Global telcos have expressed reservations about 5G, which likely reflect acombination of: 1) failure to monetize 4G, 2) reduced profitability and 3) limitedviable applications requiring nationwide 5G. For many applications, e.g., videostreaming and IoT, existing technology suffices; for others, e.g., robotics, needscan mostly be met by regional 5G rollout. For most global telcos around theworld, we expect 5G networks to be deployed like islands in a sea of 4G. Stronger political support in China should see ZTE better placed. There is stronger political support for a 5G build-out in China, with thegovernment aiming to make the nation a networking powerhouse. Hence,Chinese telcos spend on 5G capex will likely be more than their internationalpeers. Our bottom-up build suggests a total 5G capex in China of ~RMB1.5trnto be spent from 2020 (twice the estimated 4G spend), which would lead toc.RMB1.9trn in total capex spending between 2020 and 2024. This would drivea 30% lift in ZTE’s China carrier revenue in 2020 and a further 15% in 2021. Opportunities in the near term, but it is a tough environment. In the near term, operating conditions for equipment vendors remain tough,with our global team expecting a 6-7% p.a. decline in telco capex (ex US) overthe next two years. Issues at its major competitors present some opportunitiesfor share gains for ZTE, i.e. teething integration issues and potentiallyexcessive pricing discipline at Nokia and poor profitability at Ericsson. We haveassumed a 2-3ppt p.a. market share increase for ZTE in the Asia Pacific andEMEA regions over the next three years to reflect these. In China, we seelimited opportunities for ZTE to gain further material share prior to 5G, given itsalready dominant position with a 30-35% market share in wireless equipment. Many of these factors are priced in, with close to no upside potential for ZTE-A. While ZTE has put the litigation issues in the US behind it, significant executionrisks remain, given the competitive threat posed by Huawei. With ZTE-Htrading in line with its peers (albeit expensive vs. its own long-run average12mth PE), and with ZTE-A valuation already implying a bullish scenario ofshare gain, margin lift and significant capex blowout in China (leaving little freecash flow for the telcos), we rate ZTE-H a Hold and ZTE-A a Sell. Valuation and risks. PT based on mid-point of SoTP and DCF valuations (WACC 8.7%, TGR 1%). Upside risks: 1) keen 5G applications and 2) govet push to drive 5G spending. Downside: 1) share loss and 2) delays in formalizing 5G. See pp. 36–7.
声明:如本站内容不慎侵犯了您的权益,请联系邮箱:wangshiyuan@epins.cn 我们将迅速删除。
热词推荐
MORE+- 1东风什么时候止跌?我上周末连发两帖,分析东风本周走势,一堆人冷嘲热讽,这些人现在(东风汽车600006)
- 2说是用2年时间把基础夯实,后3年就可以腾飞了,结果第3年还在坑里(民生银行600016)
- 3公司22年研发费用6.4亿,占比营收30%已经非常高了,都研究了什么需要这么大研(安恒信息688023)
- 4中公呢:说它是垃圾股,因为长时间阴跌;说它是一个好股票,因为它每一次都会让你赚钱(亚夏汽车002607)
- 5发现没有,很多票现在这么玩,第一季度盈利,第二季度盈利,第三季度盈利,第(亚夏汽车002607)
- 6我来说说世纪华通为什么开板?(世纪华通002602)
- 7我个人不喜欢炒小盘和概念类业绩差的股票,但是这些票真要玩就要跑的快,要灵活,要把(世纪华通002602)
- 8重大好消息!明天涨停(世纪华通002602)
- 9抖音平台九一开分成,对小游戏头部玩家三七算是大利好,也减小对微信一个平台的依赖,(三七互娱002555)
- 10股票这个东西是刚开始非常难什么都要学,历史,政治,大宗商品,交易心理学,(三元生物301206)
- 11财务美化是个好东西三元生物的年报毛利率只有3!也就是说扣除人工房租生产成本后三元(三元生物301206)
- 12早盘波大侠建仓了中信海直今天低空经济板块不错,选择了龙头中信早在前几日就一直在关(中信海直000099)
- 13自己看下下午的分时就知道了 2:26和 2:33. 分的时候,每次有人想(设计总院603357)
- 14商用密码+华为概念+信创+国产软件格尔软件触及涨停。近一年涨停4次。异动原因揭秘(格尔软件603232)
- 15主力还比我们小散急日月从2月6号转势开始成交量稳步放大'从原来的每天1亿多到今天(日月股份603218)
- 16这是只潜力大牛股,目前已经改变了前期长期下跌趋势,从前段时间突破重要技术线来看,(日月股份603218)
- 17新产品磷酸锰铁锂碳拉米电池!供不应求!固态电池!产值百亿元(日播时尚603196)
- 18早盘介入,网达软件该股趋势不错,只要大盘不调整,下午就有望封板。[胜利]恭喜同车(网达软件603189)
- 19昨天T飞了网达软件的低仓今天13块再补回来还做14到14.4的突破预期[加油]长(网达软件603189)
- 20这是什么破玩意,涨不动,跌起来贼6@驹哥哥 @老乡别走马上拉升 @菜鸟霸王(新泉股份603179)
- 21如果你打算将炒股进行到底,那么这篇文章建议看三遍!或许不能帮助你一跃成为高手,但(维远股份600955)
- 22早评:众多利空来袭!A股迎来关键时刻周五,美股和富时中国A50以及恒生科技指数期(维远股份600955)
- 23后续持续调整为主(bk0475)(04-27)
- 24这几天在调整的时候,就可以买点。一般而言,股价创新高后,回调整理一段时间(中国海油600938)
- 253月份三桶油年报全部披露完毕,仅有中国石油年报业绩实现正增长。我们来瞧一下三桶油(中国海油600938)
- 26老头原来不是在中石化唱多的么?活活把中石化从7块唱回了5块。这次又来中海(中国海油600938)
- 27股吧都不热闹,不少人离场了吧,都在等回调,可惜马上又要新高了 (中国海油600938)
- 28咱们就守着海油,不去外面当接盘侠 (贵州茅台600519)
- 29国际原油价格高位运行助推中国海油迈向新台阶。(中国海油600938)
- 30自30.88涨停日以来,净增仓0股,成本由16.228元下降0.595元至15.(中国海油600938)
- 上海贝岭股吧
- 浙大网新股吧
- 华东科技股吧
- 隧道股份股吧
- 深赛格股吧
- 光大银行股吧
- 中国银行股吧
- 永鼎股份股吧
- 苏州高新股吧
- 新安股份股吧
- 精达股份股吧
- 中国医药股吧
- 东风科技股吧
- 金健米业股吧
- 西部资源股吧
- 招商银行股吧
- 中联重科股吧
- 中国宝安股吧
- 中集集团股吧
- 德赛电池股吧
- 复星医药股吧
- 宇通客车股吧
- 中国建筑股吧
- 葛洲坝股吧
- 大唐电信股吧
- 华丽家族股吧
- 罗牛山股吧
- 中色股份股吧
- 京东方A股吧
- 新疆天业股吧
- 天坛生物股吧
- 抚顺特钢股吧
- 锦龙股份股吧
- 云天化股吧
- 振华科技股吧
- 国中水务股吧
- 华发股份股吧
- 飞乐音响股吧
- 青岛双星股吧
- 中国核电股吧
- 中国中铁股吧
- 西部矿业股吧
- 时代新材股吧
- 科达股份股吧
- 士兰微股吧
- 浦发银行股吧
- 中金黄金股吧
- 哈投股份股吧
- 航天晨光股吧
- 同仁堂股吧
- 维维股份股吧
- 福耀玻璃股吧
- 新五丰股吧
- 中航资本股吧
- 中金岭南股吧
- 丰原药业股吧
- 四环生物股吧
- 哈药股份股吧
- 万向钱潮股吧
- 中国高科股吧