UBS: Market is expected to have a negative reaction to the performance of China United Network Communications (00762) giving a "neutral" rating with a target price of 8.1 Hong Kong dollars.

UBS released a research report stating that China United Network Communications (00762) has a "neutral" rating with a target price of 8.1 Hong Kong dollars. The company's performance in the last quarter was below expectations, with a 1.2% drop in revenue year-on-year and a 4% increase in EBITDA, both lower than forecast by 3 to 5%. During the period, net profit decreased by 48.5% year-on-year, and the final dividend per share was 0.417 RMB, with a dividend payout ratio of 61%, lower than the bank's forecast of 65%. The bank stated that due to the disappointing performance of China Unicom, the market is expected to have a negative reaction. Market concerns about the continued impact of value-added tax (VAT) on the company's net profit, as well as the lower-than-expected dividend payout ratio, further weaken market confidence in its dividend prospects.