On September 1 Ebeling Heffernan issued a strong buy on China Unicom NYSE:CHU Price Target $US20 HK:0762 Price Target $HK17. The stock has dipped since then, however Shayne Heffernan of Ebeling Heffernan says now is the time to own China Unicom.

China Unicom, China’s No. 2 mobile carrier, said on Saturday its total investments will decrease this year as it scales back spending on areas like broadband and focuses on its new 3G wireless network.

“This year our overall investments will clearly decrease from last year’s levels,” Unicom Chairman Chang Xiaobing told a media briefing in Beijing on the sidelines of the Chinese People’s Political Consultative Conference.

“But 3G remains our investment priority and we will not slow the pace of 3G development,” he said.

Unicom and its two main rivals, China Mobile and China Telecom, all began building third-generation (3G) wireless networks last year following an industry restructuring that reduced the number of players from four to the current three.

The industry spent a collective $21 billion on 3G technology last year, with 3G subscribers reaching more than 10 million by the end of the year, according to government data.

But reflecting the state of intense competition following the revamp, the Ministry of Industry and Information Technology said late last year it expects business volume for the industry should grow about 12 percent this year, but revenue is only expected to grow by a more modest 4.5 percent.

Unicom had 3.6 million 3G users at the end of January, bringing its total mobile subscriber base to about 149 million.

The company is a distant No. 2 in the market to China Mobile, the world’s largest mobile carrier by subscribers, which had nearly 530 million subscribers at the end of January, including nearly 4 million 3G users.

Unicom has also been the subject of intense speculation about overseas investment plans, following recent remarks by company officials about potential investments in Latin America and Asia with its strategic partner, Spain’s Telefonica, which owns 8 percent of Unicom.

Unicom also said last month its European unit had shown an interest in joining a group bidding for Nigeria’s former state telecoms monopoly, Nitel, including providing technical and managerial support and potentially taking a eventual equity interest.

“We’ve been looking all along at overseas opportunities, but there are no specific opportunities right now,” Chang said.

Shayne Heffernan www.livetradingnews.com

Posted by Shayne Heffernan on Mar 6th, 2010and filed underAsia, Latest News, Limelight.You can follow any responses to this entry through theRSS 2.0You can leave a response by filling following comment form or trackback to this entry from your site