The analyst rating for HKT-SS is Overweight, with a target price of $13, due to the following reasons:
1. Manageable Impact on Fundamentals: The potential revocation of HKT International's operating license by the FCC is not expected to significantly affect HKT-SS's fundamentals, as its international business revenue (excluding Greater China) is projected to account for less than 7% of total revenue in 2024, with the US market contributing only about 1%.
2. Lower Profit Margins: The profit margin from the international business is generally lower than that of the local business, indicating that the overall impact on profitability may be limited.
3. Market Sentiment: Despite the manageable impact on fundamentals, there is uncertainty surrounding the situation, which may lead to continued negative market sentiment. This sentiment is acknowledged but does not outweigh the overall positive outlook based on the company's revenue structure.
Overall, the analysis suggests that while there are risks, the company's core business remains stable, justifying the Overweight rating.
