China reports a boom in telecom services

Business | Agencies and Kevin Xu 21 Jan 2020

As many as 13.77 million 5G handsets were sold and telecom industry turnover reached 1.3 trillion yuan last year, while 113,000 5G base stations were built, according to Minister of Industry and Information Technology Miao Wei.

Industry turnover rose 18.5 percent year-on-year, and revenue from internet and related services rose 21 percent from a year ago, he said.

China Unicom (Hong Kong) (0762), meanwhile, reported that 4G customers increased at a slower pace last year, announcing a net increase of 33.84 million compared to 45.1 million in 2018.

China's industrial output exceeded expectations in December, growing 6.9 percent from a year earlier, the strongest pace in nine months, and bringing full-year expansion in 2019 to 5.7 percent - within the government's target of 5.5-6 percent.

Shares of China Mobile (0941) rose 3.7 percent to HK$68.65 while China Unicom rose 2.79 percent to HK$7.36. China Telecom (0728) also grew 3.44 percent to HK$3.31.

French investment bank Societe Generale has revised its forecast of China's GDP growth this year from 5.8 percent to 5.9 percent.

Michelle Lam, greater China economist at Societe Generale, said the risk of an escalation in the Sino-US trade tensions before the US presidential election has receded, and that the Chinese economy has shown signs of stabilizing over the past two months. She estimates China's central bank will cut the one-year rate on its medium-term lending facility by 20 basis points this year.

The bank also expects the Shanghai Composite Index to rise 11 percent to 3,400 points this year.

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