CN MIIT Awards Business License for Satellite Mobile Communication to CHINA UNICOM
New License Granted: China's Ministry of Industry and Information Technology has issued a satellite mobile communication business license to CHINA UNICOM, allowing them to offer mobile-to-satellite services.
Service Applications: The new license enables CHINA UNICOM to enhance communication services in various scenarios, including emergency situations, maritime communication, and remote area connectivity.
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US Pauses Ban on Chinese Tech Companies Before Meeting of US and Chinese Leaders: Report
US-China Leaders' Meeting: Ahead of the US-China leaders' meeting in April, the US has paused several national security measures aimed at key Chinese technologies.
Suspended Bans: The US government has put on hold bans affecting CHINA TELECOM, TP-Link routers, and the internet operations of CHINA UNICOM and CHINA MOBILE, as well as restrictions on Chinese electric trucks and buses.
Senior Vice President of China Unicom Steps Down
Company Announcement: China Unicom announced the resignation of Senior Vice President Wang Limin effective today due to a change in work arrangement.
Market Activity: The company reported short selling of $54.26 million with a ratio of 26.032%.
Stock Performance: China Unicom's stock price increased by 0.020 (+0.277%).
Market Sentiment: JPMorgan noted that the volatility in internet stocks reflects fragile market sentiment, suggesting that current adjustments may present buying opportunities.
Nomura: 2026 Poses Challenges for Chinese Telecoms; CHINA TELECOM and CHINA UNICOM Downgraded to Neutral
Telecom Industry Performance: The Chinese telecom industry experienced a significant slowdown in service revenue growth, dropping from 3.2% YoY to 0.7% in 2025, attributed to market saturation, competition, and a weak macro environment.
Broker Ratings and Target Prices: Nomura maintained a Buy rating on China Mobile while downgrading China Telecom and China Unicom to Neutral, with target prices adjusted downwards for both companies.
Citi Research: Anticipated VAT Rate Change Could Affect Service Revenue of Three Major Telecoms by Approximately 3%
Tax Adjustment Announcement: Starting January 1, 2026, the tax for 'value-added telecommunication services' will be adjusted, increasing the VAT rate from 6% to 9% for services like mobile data, SMS, and internet broadband.
Impact on Revenue: Citi Research estimates that the tax change could lead to a 3% potential impact on service revenue for major telecom operators, as they may not pass the increased tax burden onto consumers due to market competition.
<JPM Research> CN Telecom VAT Increase Expected to Affect CHINA MOBILE the Least
VAT Adjustment Announcement: Chinese telecom companies are increasing the value-added tax (VAT) on mobile data, SMS/MMS, and internet broadband services from 6% to 9%, which is expected to affect their net profits.
Impact on Net Profits: JPMorgan estimates that the profit impacts for CHINA MOBILE, CHINA TELECOM, and CHINA UNICOM will be 7.1%, 12.6%, and 11.9% respectively by 2026, with CHINA MOBILE likely facing the least damage due to its higher gross profit margin.
Dividend Yield Forecasts: JPMorgan predicts that the dividend yields for CHINA MOBILE, CHINA TELECOM, and CHINA UNICOM will be 7%, 5.7%, and 6.8% respectively in 2026, maintaining their attractiveness compared to the Hang Seng Index (HSI).
Investment Rating: Despite the VAT increase, JPMorgan has maintained an Overweight rating on the three telecom companies, indicating a positive outlook for their stock performance.
HSI Ends Day with a 611-Point Drop; Declines in Commodities, Telecoms, Chips, and Autos
Market Decline: Hong Kong stocks experienced significant losses, with the HSI dropping 611 points (2.2%) to close at 26,775, influenced by a volatile commodity market and declining resource stocks.
Precious Metals and Resource Stocks: Gold and silver prices fell sharply, with major companies like SD GOLD and ZHAOJIN MINING seeing declines of over 8%, while resource stocks like JIANGXI COPPER and CHALCO also reported significant losses.
Telecom Sector Impact: Telecom companies faced declines due to an increase in VAT from 6% to 9%, with CHINA UNICOM and CHINA TELECOM dropping over 6%, and CHINA MOBILE falling by 2.3%.
Automotive and Chip Sector Struggles: Automakers reported substantial sales declines, with BYD COMPANY and XPENG-W experiencing drops of 30% YoY and 34% YoY respectively, while the chip sector also faced losses, particularly for SMIC and HUA HONG SEMI.
US Pauses Ban on Chinese Tech Companies Before Meeting of US and Chinese Leaders: Report
US-China Leaders' Meeting: Ahead of the US-China leaders' meeting in April, the US has paused several national security measures aimed at key Chinese technologies.
Suspended Bans: The US government has put on hold bans affecting CHINA TELECOM, TP-Link routers, and the internet operations of CHINA UNICOM and CHINA MOBILE, as well as restrictions on Chinese electric trucks and buses.
Senior Vice President of China Unicom Steps Down
Company Announcement: China Unicom announced the resignation of Senior Vice President Wang Limin effective today due to a change in work arrangement.
Market Activity: The company reported short selling of $54.26 million with a ratio of 26.032%.
Stock Performance: China Unicom's stock price increased by 0.020 (+0.277%).
Market Sentiment: JPMorgan noted that the volatility in internet stocks reflects fragile market sentiment, suggesting that current adjustments may present buying opportunities.
Nomura: 2026 Poses Challenges for Chinese Telecoms; CHINA TELECOM and CHINA UNICOM Downgraded to Neutral
Telecom Industry Performance: The Chinese telecom industry experienced a significant slowdown in service revenue growth, dropping from 3.2% YoY to 0.7% in 2025, attributed to market saturation, competition, and a weak macro environment.
Broker Ratings and Target Prices: Nomura maintained a Buy rating on China Mobile while downgrading China Telecom and China Unicom to Neutral, with target prices adjusted downwards for both companies.
Citi Research: Anticipated VAT Rate Change Could Affect Service Revenue of Three Major Telecoms by Approximately 3%
Tax Adjustment Announcement: Starting January 1, 2026, the tax for 'value-added telecommunication services' will be adjusted, increasing the VAT rate from 6% to 9% for services like mobile data, SMS, and internet broadband.
Impact on Revenue: Citi Research estimates that the tax change could lead to a 3% potential impact on service revenue for major telecom operators, as they may not pass the increased tax burden onto consumers due to market competition.
<JPM Research> CN Telecom VAT Increase Expected to Affect CHINA MOBILE the Least
VAT Adjustment Announcement: Chinese telecom companies are increasing the value-added tax (VAT) on mobile data, SMS/MMS, and internet broadband services from 6% to 9%, which is expected to affect their net profits.
Impact on Net Profits: JPMorgan estimates that the profit impacts for CHINA MOBILE, CHINA TELECOM, and CHINA UNICOM will be 7.1%, 12.6%, and 11.9% respectively by 2026, with CHINA MOBILE likely facing the least damage due to its higher gross profit margin.
Dividend Yield Forecasts: JPMorgan predicts that the dividend yields for CHINA MOBILE, CHINA TELECOM, and CHINA UNICOM will be 7%, 5.7%, and 6.8% respectively in 2026, maintaining their attractiveness compared to the Hang Seng Index (HSI).
Investment Rating: Despite the VAT increase, JPMorgan has maintained an Overweight rating on the three telecom companies, indicating a positive outlook for their stock performance.
HSI Ends Day with a 611-Point Drop; Declines in Commodities, Telecoms, Chips, and Autos
Market Decline: Hong Kong stocks experienced significant losses, with the HSI dropping 611 points (2.2%) to close at 26,775, influenced by a volatile commodity market and declining resource stocks.
Precious Metals and Resource Stocks: Gold and silver prices fell sharply, with major companies like SD GOLD and ZHAOJIN MINING seeing declines of over 8%, while resource stocks like JIANGXI COPPER and CHALCO also reported significant losses.
Telecom Sector Impact: Telecom companies faced declines due to an increase in VAT from 6% to 9%, with CHINA UNICOM and CHINA TELECOM dropping over 6%, and CHINA MOBILE falling by 2.3%.
Automotive and Chip Sector Struggles: Automakers reported substantial sales declines, with BYD COMPANY and XPENG-W experiencing drops of 30% YoY and 34% YoY respectively, while the chip sector also faced losses, particularly for SMIC and HUA HONG SEMI.
