BofA Securities: Initiates "Buy" rating on China Telecom, target price HK$6

BofA Securities issued a research report, initiating coverage on China Telecom with a "Buy" rating and a target price of HK$6, while also initiating coverage on its A-shares with a "Neutral" rating and a target price of RMB7.2. The bank noted that China Telecom's H-shares are attractively valued, while the A-shares currently trade at a 67% premium to the H-shares, higher than the average 40% over the past year. The bank calculated the H-share target price based on the average of discounted cash flow and enterprise value multiples, and derived the A-share target price based on a 40% A/H premium.