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2009-3-27 02:50:00 p.m. HKT, XFNA
DJ MARKET TALK: City Telecom +26.7%; Tips 1H Profit To Soar 40%
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| 1438 [Dow Jones] City Telecom (1137.HK) soars 26.7% to HK$1.14 after tipping 1H09 net profit to increase by more than 40% on-year, which implies net profit of at least HK$66.9 million based on year-ago earnings of HK$47.8 million. City Telecom attributes earnings growth to increase in subscription revenue, economies of scale. Meanwhile, company proposed to buy back US$89.4 million worth of senior notes at 25% discount to principal. If simply annualizing 1H earnings, City Telecom trades at 5.6X forward earnings, which undemanding, implying further upside likely. Still, likely to keep funds from buying stock is thin liquidity; despite shares rally today, volume only HK$3.0 million. 250-day moving average at HK$1.39 looks unlikely troubled short term.(RLI) Contact us in Hong Kong. 852 2802 7002; MarketTalk@dowjones.com
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(Delayed by 1 hour)
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