Merrill Lynch has upgraded its profit estimate and price target on China's largest mobile operator China Mobile (HK) Ltd, saying its profitability had been underestimated. "Profitability has been understated due to conservative practices.
Delays in restructuring and 3G will likely prolong CMHK's lead over competition," said Merrill Lynch in a research note published late on Friday.
The firm raised its 12-month price target on Hong Kong blue chip China Mobile to HK$36 from HK$29, implying upside of 31 percent from current levels.
It raised China Mobile's 2005 profit estimates by 1.3 percent to HK$45.47 billion and 2006 estimates by 6.3 percent to HK$50.5 billion.
China Mobile shares fell 1 percent on Friday to close at HK$27.55. The shares account for roughly 12 percent of weighting of the benchmark Hang Seng Index.