Credit Suisse newly lowered its rating on China Netcom from “outperform” to “neutral”, saying its share price may top the target price as the prospect of China’s telecom industry restructuring gradually becomes clear.
The bank said China Netcom has a high executive risk, and its weight in the potential merger with China Unicom has not been fixed. In addition, the stock price buoyed recently.
Credit Suisse suggests investors to cut holdings at high price and turn to China Mobile.
China Netcom fell 4.9% to end at 23.25 HK dollars Friday, while China Mobile shed nearly 4.2% to close at 110.1 HK dollars.