China Unicom upgraded to "buy" by Merrill Lynch

BEIJING, Jun 27, 2008 (Xinhua via COMTEX) -- CHU | Quote | Chart | News | PowerRating -- Merrill Lynch lately upgraded its rating on China Unicom (0762.HK; CHU.NYSE) to "buy" from "neutral", but adjusted the target price down to 18 HK dollars from 19.5 HK dollars after valuating for a new China Unicom when the company incorporates China Netcom (0906.HK; CN.NYSE).

China Unicom would benefit the most from the reshuffle of China's 3G operators, and it could expect three advantageous factors in the following 12 months, namely favorable supervision policy, synergistic effect on capital expenditure after merger with fixed-line business, and technological advantage in the 3G era, said Merrill Lynch.

The company's expected enterprise value to EBITDA (earnings of before interest, taxes, depreciation and amortization) in fiscal 2009 is 3.9 to 1, and the stock possesses the largest room for going up despite risk of integration.

China Unicom lost 0.34 HK dollar or 2.38 percent to close at 13. 96 HK dollars Friday.

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