China Communication Services 0552

[winston]

$361m share placement

China Communication Services Corp (0552) is seeking to raise up to HK$361 million in a share placement, according to a term sheet obtained by The Standard.

The telecommunications infrastructure services provider is selling 62.5 million secondary shares at between HK$5.58 and HK$5.78 apiece, representing a discount of 4.9 to 8.2 percent to its closing price yesterday.

Morgan Stanley is the bookrunner of the deal.

Shares of China Communication Services ended at HK$6.08 yesterday, up 3.05 percent.

Source: The Standard HK

[winston]

Not vested yet. Still waiting for the right time to pick some up..

Comservice placement reaps $356m
Stephanie Tong
Thursday, July 31, 2008

A shareholder of China Communication Services Corp (0552) reaped about HK$356 million in a share placement, according to a term sheet obtained by The Standard.

The shareholder sold 62.5 million existing shares of the telecommunications infrastructure services provider at HK$5.70 apiece, representing a discount of 6.25 percent to yesterday's close of HK$6.08.

The offer price is near the top end of the indicative range of between HK$5.58 and HK$5.78 per share.

"The placement will put some pressure on the share price of China Comservice. But that will not be for long, probably for one to two weeks After all, its fundamentals are good," said an analyst at an Asian brokerage group.

China Comservice's parent China Telecommunications Corp on Monday announced that it will spend 80 billion yuan (HK$91.4 billion) on upgrading and expanding its mobile network in the next three years. Market sources said about 10-15 percent of the sum will be spent on the telecommunications construction sector.

"As a leading player in the industry, China Comservice will definitely benefit," the analyst said

[winston]

Not vested.

HK-listed China Communications Services H1 net profit up 11 pct on revenue gain

HONG KONG (XFN-ASIA) - China Communications Services Corp said its first half to June net profit rose 11 pct year on year to 567.02 mln yuan as growth of its core telecom support services businesses increased.
Total revenue for the period was up 37.5 pct to 13.63 bln yuan.

Revenue from telecommunications infrastructure services was 5.895 bln yuan, up 9.7 pct, driven mainly by orders from its three main telecom operator customers.

Revenue from business process outsourcing services was 6.07 bln yuan, up 83.7 pct, while revenue from applications, content and other services was 1.66 bln yuan, up 35 pct .

The company's three major operator customers, China Mobile, China Telecom and China Unicom, accounted for 7.98 bln yuan of revenue in the first half, up 23 pct.

China Communications Services said the restructuring of the national telecom industry begun this year provides new opportunities.

"In the coming two to three years, we expect that the 2G and 3G network construction, expansion and optimization by the telecommunications operators in China will offer favorable growth potential for our telecommunications infrastructure services business," chairman Li Ping said in a statement.

China Communications Services closed the morning up 0.49 hkd or 8.99 pct at 5.94.

[winston]

Not vested.

China Communications Services Stock Rating Reduced at HSBC
By John Liu

Sept. 9 (Bloomberg) -- China Communications Services Corp., the nation's biggest builder of phone networks, had its stock rating reduced at HSBC Holdings Plc to ``underweight'' on concern that the company's profitability is falling.

``We are worried about the faster-than-expected decline in gross profit margin,'' Walden Shing and Tucker Grinnan, analysts at HSBC, wrote in a report sent to investors today. The bank cut the company's rating from ``neutral'' and reduced its 12-month share-price estimate by 17 percent to HK$5.20 from HK$6.30, according to the report.

[winston]

Very volatile stock. Down 32% yesterday, up 24% today..

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STOCK ALERT -China Comm Services jumps as worries on unfavorable regulation ease

HONG KONG (XFN-ASIA) - China Communications Services Corp Ltd (CCS) shares were sharply higher, recouping most of yesterday's steep loss, after Citigroup said China's new tower-sharing regulations will have minimal impact on the firm.
At 11:10 am, the stock of the mainland telecom services provider was up 0.79 hkd or 24.4 pct at 4.03, after tumbling more than 32 pct yesterday on worries about loss of business due to the new regulation.

The Ministry of Industry and Information Technology issued a new regulation recently, stating that all new telecom towers will have to be shared among operators.

CCS Management expects no negative impact from the regulation, Citigroup said in a note to investors.

"Operators' capex savings are mainly from less tower investment and lower property rental, none of which is CCS's revenue source; and also CCS expects more base station maintenance revenue on shared tower/base station, as a neutral vendor to provide maintenance services," the note said.

A large portion of CCS's revenue comes from maintaining and upgrading telecom towers and base stations, and with more than one firm using the same tower, the frequency of maintenance orders per facility is set to increase for the company, it added.

Citigroup has a "buy" call on the stock and a 7.00 hkd target price, while Goldman Sachs maintained a "buy" call on the stock after the selldown yesterday but cut its target to 5.4 hkd from 6.5.

[winston]

Not vested.

Cisco cuts China Com Services stake by half-sources

HONG KONG, Dec 18 (Reuters) - Cisco Systems has sold 90 million China Communications Services Corp shares at HK$4.36 each for HK$392 million ($50.6 million), trimming its stake in the Chinese firm by nearly half, fund manager sources said on Thursday.

The price was nearly the middle of an indicative price range of HK$4.27 to HK$4.50 each and represented a 12.3 percent discount to the stock's close of HK$4.97 on Wednesday.

Networking equipment giant Cisco is still holding 98 million shares in China Communications after the sale, Goldman Sachs said in a research note.

[winston]

DJ MARKET TALK: CCS Offers Better Earnings Visibility - Goldman

1309 [Dow Jones] STOCK CALL: Goldman Sachs keeps Buy on China Communications Services (0552.HK), viewing CCS as key beneficiary of China's burgeoning telco capex cycle. "We think CCS offers better-than-average earnings visibility for (the second half of 2008) and 2009, as it is in one of the few markets globally that is still seeing demand increase," says Goldman Sachs.

Adds CCS's 2008 results less likely to disappoint, vs results for telco operators, and thus stock deserves to outperform. Keeps target at HK$5.40 based on 14X 2009 P/E. Stock midday +0.9% at HK$4.44.

[winston]

DJ MARKET TALK: DB Ups China Communications Svcs To Buy From Hold

1205 [Dow Jones] STOCK CALL: Deutsche bank upgrades China Communications Services (0552.HK) to Buy from Hold; says believes entry point has opened following share price contraction since mid-February. "With both long-term secular growth and margin improvement opportunities, we view CCS remains one of the better run names in our broader Asian Tech and Telco space."

Sets target at HK$5.09. Says, as a top telco service vendor, CCS remains key beneficiary of China's telco capex cycle. Expects double-digit EPS growth in 2009. Prefers CCS to ZTE (0763.HK) as a play on Chinese telecom investment. Stock +1.8% at HK$4.48.

[winston]

DJ MARKET TALK: Citi Ups China Comm Services Target To HK$5.44

1206 [Dow Jones] STOCK CALL: Citigroup raises China Communications Services (0552.HK) target price to HK$5.44 from HK$5.20 after revising up 2009, 2010 sales forecast on back of strong demand for telecom support services driven by higher capex guidance from operators. House expects 25% top line growth in 2009.

However, keeps Hold rating as margin "is under pressure, as operators will be more focused on cost control in the face of stiff competition." Adds, "growth story after 2009 is less exciting.

Business Process Outsourcing will continue to see robust growth as operators outsource non-core operations to reduce cost; margin will be under pressure as product mix starts to deteriorate." Stock off 4.1% at HK$4.66.

[winston]

DJ MARKET TALK: Nomura Optimistic On China Comm Services For 2009

1208 [Dow Jones] STOCK CALL: Nomura keeps China Communications Services (0552.HK) at Buy with target HK$5.70. Says, 2008 results were inline with market expectations. Notes, with management's stringent control on personnel costs, personnel costs as percentage of total revenue improved to 24.6% in 2008 from 25.6% in 2007.

Says also encouraging to see V-shaped improvement of gross profit margin. "We remain optimistic that the company should see promising results in 2009 owing to acceleration of 3G network rollout by three mainland mobile operators; stable market share from CCS's established name in domestic market." Stock off 3.9% at HK$4.67; HSI up 0.4%.