摩根司坦利对小灵通的市场分析（英文版）

In-DepthPleaseseetheimportantdisclosuresattheendofthisreport.Page1IndustryEquityResearchAsia/PacificIndustryOverviewIssue3,January29,[e-mail][e-mail][e-mail]–ACurseoraBlessing?KEYRATINGSChinaMobile(HK)(0941.HK,HK$19.05)Equal-WeightTarget:HK$21.40ChinaUnicom(0762.HK,HK$5.8)Equal-Weight-VTarget:HK$5.60ChinaTelecom(0728.HK,HK$1.70)Overweight-VTarget:HK$1.70中國電訊透視•PHSoperationsappeartobeenhancingChinaTelecom’sprofitabilityAsPHSequipmentpricesdecline(down50%onourestimates)andusersgenerateunitrevenuessimilartothoseforfixedline,webelievePHSaddsincrementalvaluetoChinaTelecom.•Regulatorisadoptingmoreofa“hands-off”approachPreoccupiedwithitsowntransitionbetweenoneministerandanother,andwithanincreasingfocusonfullyliberalizedmarketcompetition,theMinistryofInformationIndustry(MII)hasnotintervenedinPHS’sencroachmentintolargerprovincialcities–amovepreviouslyforbiddenbytheregulator.•AllducksareinarowforPHStogrowlikeaweed–buttherearestilllimitationsAsadefensivetoolagainstfixedtomobilesubstitution,PHShasworkedwell.Byaddingpricingpressureandcompetitiverisktothecellularindustry,however,thePHSrolloutstrategymaybackfireonceChinaTelecomreceivesacellularlicenseofitsown.•Pressureonthecellularplayersatbothlow-andhigh-endofthemarketThepopularityofPHShasnotjustdraggeddownpricingatthelow-endofthecellularmarket.Wealsoseepotentialrisksthatmid-tohigh-enduserscouldmigratepartoflocaltraffictoPHSforeconomicreasons.Weestimate10-15%downsideriskincellularARPUshouldthattrendplayout.•Conclusion:WestillfavorChinaTelecomforthelongtermOna12-monthview,wefavorChinaTelecomovertheotherwirelesscarriersinChinagivenlowerregulatoryandcompetitiverisksaswellasthesafetyofa4.5%yield.However,intheshortterm(fromnowuntilF2002resultsinMarch),weseeatradingopportunityinChinaMobile.Thecompanycouldsurprisethemarketwithahigher-than-expecteddividendpayoutormorestablemargins.Tobeclear,theChinaMobiletradeistactical,notstrategic.•WehaveanIn-LineviewonChina’sTelecomIndustryFortheoverallindustry,undemandingvaluationsarecheckedbyrisingcompetitiverisksandamurkyregulatoryenvironment.TheChinaTelecomMonitorTheChinaTelecomMonitor–Issue3,January29,2002Pleaseseetheimportantdisclosuresattheendofthisreport.Page2Focus:PHSinChinaLittleSmart–ACurseoraBlessing?TherecentexpansionbyChinaTelecom’sPHS(personalhandyphonesystem)serviceintolargercities,includingChongqing,seemstoindicatethatPHSwillgrowfasterthancurrentconsensusforecasts.AlthoughmanagementplayeddownPHS’sgrowthpotentialintheinitialpublicoffering(IPO)roadshow,itnowappearsthattheMIIisturningablindeyetothisexpansion.Or,perhapsChinaTelecomisexploitingtheMII’sindecisivenessontheissueofmobilelicensesandPHS.Eitherway,PHSisgrowingfastandneedsacloserlook.Ourkeyconclusionsareasfollows:•AsPHSequipmentpricesdeclinedramatically(byourestimates,theyaredown50%)andusersgenerateunitrevenuessimilartothoseforfixedline,webelievePHSwilladdincrementalvaluetoChinaTelecom(CT).•PHS’snegativeimpactonthecellularmarketisnotlimitedtothelowend.Inadditiontodraggingdownpricesatthelowend,PHSalsoposesariskthatmid-tohigh-enduserswillmigratepartoftheirlocaltraffictothissystemforeconomicreasons.•AlthoughPHShasworkedwellforCTandChinaNetcom(CNC)asadefensivetoolagainstfixedtomobilesubstitution,thePHSrolloutstrategymaybackfireonceChinaTelecomreceivesacellularlicenseofitsown.Conclusion:StillFavorChinaTelecomfortheLongTermOna12-monthview,wefavorChinaTelecomovertheotherwirelesscarriersinChinagivenwhatweseeaslowerregulatoryandcompetitiverisksaswellasthesafetyofa4.5%yield.Intheshortterm,however(fromnowuntilF2002resultsinMarch),weseeatradingopportunityinChinaMobile.Webelievethatthecompanycouldsurprisethemarketwithahigher-than-expecteddividendpayoutormorestablemargins.Tobeclear,aChinaMobiletradewouldbetactical,notstrategicSize,ImpactonCTandProfitAnalysisInthissection,weputinperspectivePHSrelativetoCT’soverallbusinessesandaddressitsprofitability.Conceptually,thisbusinesslookslikeaneasywinnerforCT–capitalexpenditureislowerthanforwireline,yetaveragerevenueperuser(ARPU)andoperatingexpendituresaresimilar,implyingthatincrementalreturnsshouldbehigher.Infact,therapiddeclineinPHScapexperline,fromUS$150inmid-2002toUS$80currently,accentuatesChinaTelecom’seconomicincentive,particularlyattheprovinciallevel,torolloutthissystem.Itisnotthatsimple,however.Therearelimitations:PHS’scapexcurveislinear,alarger-than-expectedPHSsystemcouldjeopardizeCT’schancesforamobilelicense.Worseyet,PHScouldplaceunnecessarilyhighpressureonmobiletariffs,cannibalizingthecompany’smobilebusinessevenbeforeitislaunched!Letusaddresseachoftheseissues.1.Theissueofscale.OurcurrentestimatesindicatethatCTwillhave3.4millionPHSsubscribersbyyear-end2003and3.6millionby2004,orroughly5%and4%ofthetotal.Thus,PHSisarelativelysmallbusinessforCT.However,ourestimatesmayturnouttobeconservativeifCTdecidestoexpandthisbusinessaggressively.Exhibit1isasensitivityanalysisshowingtheimpactofincreasingthepercentag