Telecom gear makers surge on 3G hopes
TheStandard writes…Shares of three telecom equipment makers jumped more than 5 percent at the end of the week, with Comba Telecom Systems (2342) up 6 percent, ZTE (0763) up 5 percent and China Wireless Technologies (2369) up 5.3 percent.
Hong Kong-based Comba rose to HK$3.20, from its previous close of HK$3.02, its lowest level since last month. ZTE, the second-largest telecom gear vendor in the mainland, rose to HK$36.15 after hitting a two-month low of HK$33.40 Wednesday. China Wireless closed at HK$1.58.
“China’s telecom vendors have been on track for solid recovery, as they have been benefiting the most from China’s hefty third-generation investments,” said DBS Vickers analyst Steven Liu Thursday.
Revenue and earnings will rise significantly in the next few years because the sector has “been preparing to snatch a lion’s share of the 3G pie.”
Liu added: “For example, Comba and ZTE have spent significantly on research and development for 3G handsets in the past three years. I think their operating expenses will now stabilize and we shall see margins improving.”
Overseas revenue is also up in the sector.
ZTE said it should comprise more than half of total revenue for last year, compared with 35 percent in 2005. Comba’s overseas revenue jumped 185 percent in the first half of last year.
