BEIJING, Aug. 23 (InfoChina) – UBS has lifted the rating on China Netcom Ltd. (NYSE: CN, 0906. HK) to “neutral” and set the target price at 20 HK dollars, saying the target price based on discount cash flow represents the favorable influence of the expected reshuffle of China's telecom industry.
UBS downward adjusted the rating on China Netcom to “sell” two months ago due to further postponement of reshuffle of China’s telecom industry and issuance of 3G licenses. But it said it should give a “neutral” rating for the telecom operator, after its share price dropped by 19 percent since the end of June.
According to UBS, the industry reshuffle may boost China Netcom’s share price, but the schedule for the reshuffle can hardly be predicted and may be postponed to 2009.
Besides, UBS said the market underestimated the potential executive risk for possible merger between China Netcom and China Unicom Ltd. (NYSE: CHU, 0762. HK).
The H-share price of China Netcom went up 1.1 percent to close at 18.24 HK dollars on August 22.(Edited by Li Xiaoyu,
)
China Stock News 
