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2009-6-26 11:22:00 a.m. HKT, XFNA
DJ MARKET TALK: CLSA Tips Little Catalyst For PCCW, Keeps At Sell
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| 1058 [Dow Jones] STOCK CALL: CLSA sees little catalyst for PCCW (0008.HK), tips as likely to continue lagging market. Says, PCCW's payment of a special dividend last month marks end of another failed sale/privatization effort. "Any further attempts would be very unlikely over the next 12-24 months. We don't expect another special dividend given that net debt is up 60%." Adds, Hong Kong telecom market remains highly competitive, lucrative fixed-mobile interconnection charges may be at risk due to changes in regulations. Says, ex-dividend target HK$1.70, implying 10X 2010 P/E and 6.4X 2010 EV/EBITDA. Says valuation not expensive, but company is ex-growth, has high leverage and only yields 3%-4%. Stock flat at HK$2.05. (LWS) Contact us in Hong Kong. 852 2802 7002; MarketTalk@dowjones.com
(Delayed by 1 hour)
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