"Hutchison Whampoa, the most aggressive investor in European third-generation (3G) mobile telecoms, is earning kudos from analysts for the performance of its 3G operation, which got off to a late start last year and has long been subject to investor scepticism.
Goldman Sachs has said in a note that it has raised its 12-month price target on Hutchison to HK$80 from HK$75 and lifted its 2005 earnings per share forecast by 8 per cent to HK$1.41 after a visit to Europe and a meeting with the management of Hutchison's 3 unit.
"During our trip we carried out 3G retail channel checks and had a meeting with 3 management which reinforced our view that a positive turnaround at 3 is under way," Goldman Sachs' analysts reported in a recent research note.
The investment bank has given the stock an "outperform" rating, which it renewed for inclusion on its "current investment list" of recommended stocks.
Brokerage CLSA, meanwhile, has raised its rating on ports-to-telecoms conglomerate Hutchison Whampoa to "buy" and set a price target of HK$84, implying a 32-per-cent upside, citing encouraging signs from the firm's third-generation mobile network business as the reason for setting the price at the level it did.
CLSA analyst Danie Schutte said in a recent research note that the giant Vodafone Group has "kept the gloves off" by launching its own service using a premium price strategy.
"While a future risk of a 3G price wars exists, Vodafone's recent non-aggressive 3G launch suggests that a window of opportunity still exists for Hutchison to continue attracting subscribers through aggressive pricing and in turn attaining an early cash flow breakeven," says Shutte.
Hutchison Chairman Li Ka-shing has said that the firm's 3G business was on track to reach breakeven on an EBITDA (earnings before interest, taxes, depreciation and amortization) basis in 2005.
(excerpt taken from chinadaily.com)"
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