美国电信行业：分歧和融合的机遇

1、United StatesEquitiesTMTOpportunities from divergence and fusionUS TelecomsAT&T deep dive suggests pay TV risks more than discounted; see c22% implied upside from currentlevelsUnited StatesEquitiesTMTOpportunities from divergence and fusionUS TelecomsTMUS/S tie-up approval may provide more upside; o

2、n stand- alone basis, we continue to prefer TMUS overSprintWe raise TP on Charter to USD340 to reflect latestguidance on capex and retain Hold; raise TP on TMUS toUSD80 in HYPERLINK /R/10/WLfBDdplqKbM?docid=1112320 HYPERLINK /R/10/WLfBDdplqKbM?docid=1112320 istoWe a TWX 28 February 2019Sunil Rajgopa

3、lAnalyst, Global Telecoms HSBC Securities (USA) Inc. HYPERLINK mailto:sunilrajgopal sunilrajgopal+1 212 525 0267Christian Fangmann* Analyst, TelecomsHSBC Trinkaus & Burkhardt AG HYPERLINK mailto:christian.fangmannhsbc.de christian.fangmannhsbc.de+49 211 9102002NealeAnderson*Head of Telecoms Research

4、, Asia PacificThe Hongkong and Shanghai Banking Corporation Limited HYPERLINK mailto:neale.anderson.hk neale.anderson.hk+852 2996 6716Nicolas Cote-Colisson*Head of European Telecoms Equity ProductHSBC Bank plc HYPERLINK mailto:nicolas.cote-colisson nicolas.cote-colisson+44 20 7991 6826aais it a in H

5、YPERLINK l _bookmark0 HYPERLINK l _bookmark1 We is in is a We it a 5G HYPERLINK l _bookmark2 HYPERLINK l _bookmark9 HYPERLINK l _bookmark10 HYPERLINK l _bookmark13 We Key valuation measures and changes to target pricesEmployedbyanon-USaffiliateofHSBCSecurities(USA)Inc,andis not registered/ qualified

6、 pursuant to FINRAregulationsCompanyTickerCurrencyCurrent price TP OldRatingOldNewUpside/ downsideMarketcap(USDm) EV/EBITDA_ Net debt/EBITDA_ 2019e2020e2019eAltice USAATUS.NUSD21.7825.0025.00BuyBuy14.8%21,4779.8x9.3x5.1x4.8xAT&TT.NUSD31.0638.0038.00BuyBuy22.3%226,2595.8x5.6x2.7x2.5xCharterCHTR.OQUSD

7、345.03310.00340.00HoldHold-1.5%77,7579.4x9.0 x4.4x4.2xComcastCMCSA.OQUSD38.5345.0045.00BuyBuy16.8%174,0217.7x7.0 x2.8x2.4xDISHDISH.OQUSD31.9624.0024.00ReduceReduce-24.9%18,31613.2x14.6x5.1x5.4xSprint*S.NUSD6.354.804.80ReduceReduce-24.4%25,9047.3x7.4x4.3x4.1xTMUS*TMUS.OQUSD72.1276.0080.00BuyBuy10.9%6

8、1,3187.3x6.6x1.8x1.1xVerizonVZ.NUSD56.7262.0062.00BuyBuy9.3%234,3706.7x6.4x2.1x1.9xSource: Refinitiv Datastream, HSBC estimates. Priced as of close at 27 February 2019. *TMUS and Sprint multiples based on cash EBITDADisclosures & DisclaimerThis report must be read with the disclosures and the analys

9、t certifications in the Disclosure appendix, and with the Disclaimer, which forms part of it.Issuer of report: HSBC Securities (USA) IncView HSBC Global Researchat: HYPERLINK / Contents HYPERLINK l _bookmark0 Opportunityindivergence3 HYPERLINK l _bookmark2 andfusion-ledprospects6 HYPERLINK l _bookma

10、rk3 TMUS/Sprint tie-up: see reasonable HYPERLINK l _bookmark3 chancefor approval HYPERLINK l _bookmark4 4-to-3: Picturingthefuture7 HYPERLINK l _bookmark5 NewCo: Synergies, implied equity HYPERLINK l _bookmark5 value, EPS, FCF andleverage HYPERLINK l _bookmark6 Estimated EPS impact under HYPERLINK l

11、 _bookmark6 different scenarios; expect EPS to HYPERLINK l _bookmark6 meaningfully accretivein2023e10 HYPERLINK l _bookmark8 FCF and leverage estimates under HYPERLINK l _bookmark8 various scenarios HYPERLINK l _bookmark10 Estimate changes, valuation HYPERLINK l _bookmark10 and risks12 HYPERLINK l _

12、bookmark11 Estimatechanges12 HYPERLINK l _bookmark14 Altice USA HYPERLINK l _bookmark14 (ATUS US, Buy,TPUSD25)14 HYPERLINK l _bookmark15 AT&T HYPERLINK l _bookmark15 (T US, Buy,TP USD38)15 HYPERLINK l _bookmark16 Charter HYPERLINK l _bookmark16 (CHTR US, Hold, new TP USD340) 16 HYPERLINK l _bookmark

13、17 Comcast HYPERLINK l _bookmark17 (CMCSA US, Buy,TPUSD45)16 HYPERLINK l _bookmark19 Dish HYPERLINK l _bookmark19 (DISH US, Reduce,TPUSD24)17 HYPERLINK l _bookmark20 Sprint HYPERLINK l _bookmark20 (S US, Reduce,TPUSD4.80)18 HYPERLINK l _bookmark21 T-Mobile US HYPERLINK l _bookmark21 (TMUS US, Buy, n

14、ew TP USD80) 18 HYPERLINK l _bookmark22 Verizon HYPERLINK l _bookmark22 (VZ US, Buy,TPUSD62)20 HYPERLINK l _bookmark23 Disclosureappendix29 HYPERLINK l _bookmark24 Disclaimer32Opportunity in divergenceAT&Ts current trading levels suggest that the market is being overly cautious either on the value o

15、f the pay TVbusinessor it hints at a disconnect in how the market values AT&T assets versus those of similar businessesWe retain our Buy rating on AT&T with a DCF-based target priceof USD38Current valuations denote a valuation discrepancyeither the market is overly discounting the pay TV business or

16、 undervaluing AT&Ts assets in comparison to the peer groupOpportunity in divergenceWe think AT&T, with its strong position in mobile, fixed broadband, pay TV and content assets, remains strategically well placed (compared to most of the other peers). The acquisition of TWX, if anything, has led to a

17、 firming of AT&Ts position, making it the only player with scale across tele-media businesses. Although the transaction has led to a jump in leverage, we do not expect the increased leverage to have an impact on dividends; besides, the asset monetization plans could accelerate the deleveraging proce

18、ss (note: At an analyst conference on 10 January 2019, AT&T CFO John Stephens, stated that the company was targeting USD6-8bn from asset monetization including the sale of Hulu, Sky Mexico among otherassets).Additionally, we see the outcome on the AT&T/TWX appeal as positive, allowing AT&T to accele

19、rate the integration of Time Warner assets and new product rollouts1.AT&Ts superior strategic positioning and financial standing (versus most peers), theoretically, should have commanded better multiples than peer group; in contrast, our assessment of AT&Ts various businesses versus the respective p

20、eer group suggests that either the market is overly discounting the pay TV business or undervaluing AT&T assets in comparison to the peer group, which in our view is unwarranted.Sum-of-the-parts approach denotes a valuation gapWe base our valuation of AT&T on a DCF basis, which leads to our fair val

21、ue target price of USD38 per share. In the following section, we assess AT&Ts various assets versus their peer groups to any obvious gaps our DCF, and this if anything, supports our DCF-based valuation and leads us to reaffirm our Buy rating on the stock.We believe AT&Ts businesses can be broken dow

22、n into eight parts (listed below):Mobility (c39% of revenue): This involves the US mobile business; we use a 7.0 x EV/EBITDA multiple for this business based on peer group trading multiples of Verizon and T-Mobile as proxies which are pre-dominantlymobile.Business wireline (c14% of revenue): The wir

23、eline assets include business wireline segment (excluding the U-Verse and broadband revenues reported underthe1 US District Judge Richard Leons ruling on the DOJ case to block AT&Ts acquisition of Time Warner on 12 June 2018 had allowed AT&T to acquire Time Warner. However, DOJ had appealed against

24、this ruling and on 26 February 2019 the appeals court affirmed the initial ruling to approve the acquisition.AT&T - Implied equity value per share based on peer multiples vs current equity value (per share)0.84370.843731235950403020100ImpliedEVNetdebtAssociates+MinoritiesImpliedEquityValueCurrent Eq

25、uityValueSource: HSBC estimatesEntertainment segment). We attribute 5.0 x 2019e EBITDA for the business, in-line with pure-play wireline businesses like Frontier and Centurylink.Warner Media (c19% of revenue): We value WarnerMedia assets in-line with the peer group (Viacom, CBS, Walt Disney, Discove

26、ry and Lionsgate) median. We value this business at 10.5x 2019eEBITDA.U-Verse (13% of revenue): To arrive at the value of the U-Verse business, we exclude DirecTV related EBITDA which we assume to be at 25% of DirecTV revenues from the Entertainment segment numbers. Stripping off DirecTV business nu

27、mbers, in our view, makes the Entertainment group broadly comparable to Cable TV businesses like Charter, Altice USA and Liberty Global. As such we use the cable peer group median multiple of 8.5x 2019e EBITDA to value thissegment.DirecTV (c11% of revenue): This includes the satellite pay TV operati

28、ons. Our valuation of DirecTVs closest peer DISH, stripping out the spectrum asset value assigned in our valuation denotes a trading multiple of 5.5x for DISHs pay TV business; which we use as the base to value AT&Ts satellite TVasset.International pay-TV business (c2% of revenue): We value the busi

29、ness in-linewith our assumptions used in our DCF evaluation using a WACC of 9.3 % (see pages HYPERLINK l _bookmark14 14 HYPERLINK l _bookmark18 -16 for details).Mexican wireless business (c2% of revenue): Wevalue the business in-line with our assumptions used in our DCF evaluation using a WACC of 8.

30、3% (see pages HYPERLINK l _bookmark14 14-15 for details).Xandr (c1% of revenue): The Xandr segment provides advertising services and includes advertising platform AppNexus. We value this business based on trading multiples for companies focussed on the advertising market (WPP, Publicis, Dentsu, IPG

31、and Omnicom). We value the business on a peer group median of 7.5x 2019eEBITDA.We We All in, the above assumptions lead us to an implied equity value of cUSD269bn or USD37 per share. This exercise suggests to us that AT&T stock appears to be trading at a discount of c18% on DCF basis and c15% on tra

32、ding prices/multiples of similar assets.Peer group for each of AT&T businessesTickerCurrencyCurrent priceTarget priceRatingEV/EBITDA2019eMobileT-Mobile USTMUS USUSD721.1280.00Buy7.3xVerizonVZ USUSD56.7262.00Buy6.7xBusiness wirelineFrontierFTR USUSD2.96-NR4.8xCentury LinkCTL USUSD13.1-NR5.3xDirecTVDi

33、sh (pay-TV business)DISH USUSD31.9624.00Reduce4.1xU-VerseComcastCMCSA USUSD38.5345.00Buy7.7xCharterCHTR USUSD345.03340.0Hold9.4xLiberty GlobalLBTYA USUSD26.2632.00Buy6.7xATUSATUS USUSD21.7825.00Buy9.8xWarner MediaCBSCBS USUSD49.62-NR7.8xWalt-DisneyDIS USUSD112.78-NR10.5xLionsgateLGF/A USUSD15.4-NR11

34、.2x21CFFOXA USUSD50.41-NR12.0 xViacomVIAB USUSD29.01-NR6.4xXandrDentsu4324 JPJPY4815-NR7.8xIPGIPG USUSD23.66-NR7.6xOmnicomOMC USUSD75.34-NR7.5xPublicisPUB FPEUR48.3568.00Buy6.0 xWPPWPP LNGBP8.559.60Hold6.4xSource: HSBC estimates, Refinitiv Datastream, Bloomberg. Priced as of close at 27 February 201

35、9.AT&T SoTP valuation based on peer trading multiples 2019eEV/EBITDAEBITDAImplied EVMobile7.0 x30,204210,901Business wireline5.0 x9,80949,440DirecTV5.5x5,07927,936U-Verse8.5x4,51038,522Warner Media10.5x10,049105,123Xandr7.5x1,56111,727International3.4x1,0143,429MexicoNM-24446Corp/eliminations6.8x-1,

36、852(12,546)Implied EV434,580Net Debt171,301Associates/investments6,245Minorities124# shares outstanding (m)7,328Implied price per share (USD, rounded)37Source: HSBC estimates, Refinitiv Datastreamand fusion-led prospectsTMUS operational performance continues to be robust on a stand- alone basisLooki

37、ng ahead of the regulatory opacity, our analysis suggests a NewCo market value of cUSD88-125bn or up to c40% implied upside in a blue-skyscenarioWe raise our target price on TMUS to USD80 (from USD76)and retain our BuyratingTMUS operational performance continues to be robustTMUS continues to demonst

38、rate strong operational performance with 6.4% y-o-y revenue and 9.6% adjusted EBITDA growth in Q4 2018. The companys guidance for 2019 suggests continuation of the momentum.For 2019e, we estimate revenue to grow by 4.5% and adjusted EBITDA by 6% for 2019e. We expect post-paid subscriber additions to

39、 be at 3.56m (versus the companys guidance range of 2.6-3.6m); adjusted EBITDA to come in at the high end of the guidance range (guidance: USD12.7-13.2bn). While the one-off expenses related to the proposed merger with Sprint and accounting changes do lead to revisions to our 2019e EBITDA estimates

40、(see page HYPERLINK l _bookmark12 13), the stabilization in ARPU, primarily, in the post-paid phone segment and our expectation for the market to remain rational on pricing drive us to increase our long-term revenue and EBITDA estimates.The changes to our revenue and EBITDA estimates for 2020e and a

41、head lead us to our new fair value target price of USD80 per share (previously USD76); this implies an upside of 9.5%. We value TMUS US using a discounted cash flow model for which we assume a WACC of 7.7%, which is based on a risk-free rate of 3.0%; an equity risk premium of 4.1% (20-year average m

42、arket implied equity risk premium); beta of 1.0; an additional risk premium of 1.5% for mobile competition; an additional risk premium of 0.25% for the potential for an interest rate hike; a tax rate of 21%; and a debt/total capital ratio of 30% (all unchanged).Our TP of USD80 implies an EV/EBITDA o

43、f 7.8x on FY2019e (7.8x on adjusted cash EBITDA basis) and upside of 10.9%. We retain our Buy rating because we think TMUSs strong operational performance is likely to drive superior revenue and EBITDA performance vs peers, and the company looks relatively well positioned to deliver healthy ROIC we

44、forecast ROICs of c11% for 2019e-21e.Note: our fair value target price of USD80 for TMUS (standalone) does not include any potential impact from the TMUS/Sprint deal synergies, integration costs, or risks. See pages HYPERLINK l _bookmark3 7 HYPERLINK l _bookmark9 -11 for details on any potential dea

45、l-related synergies and valuation of a potential NewCo (assuming deal approval).TMUS/Sprint tie-up: see reasonable chance for approvalThe TMUS/Sprint tie-up review is still in progress, with both the DOJ and the FCC reviewing the transaction. Given that the transaction review is now past above 100 d

46、ays of the FCCs informal 180-day shot clock; we believe a concrete decision may be expected over the next two months. While the FCC began its review of the transaction on 18 July 2018, the FCC has paused the review process twice; the first time (between 11 September to 4 December 2018) for want of a

47、dditional time to allow the FCC staff and third parties to review additional information provided by companies, and the second time (from 2 January to 29 January) impacted by the US Government shut down.Lately, while a few lawmakers2 have expressed concerns over the TMUS/Sprint deal, we doubt it wil

48、l have an impact on the regulatory review process. Conversely, TMUS CEO John Legere has defended the deal, hinting at job creation; the company has also promised that the NewCo would not raise wireless plan rates until three years post-merger. Note that on 4 February TMUSs CEO in a letter to the FCC

49、 stated: “While we are combining our networks over the next three years, T-Mobile today is submitting to the commission a commitment that I stand behind a commitment that New T-Mobile will make available the same or better rate plans for our services as those offered today by T-Mobile or Sprint”.All

50、 in, given T-Mobiles commitments/comments around jobs, pricing and 5G network rollout which also appears to be a key focus area for the current administration we believe that the deal has a reasonable chance of approval.As such, in the following section, we refresh our initial assessment of NewCo (s

51、ee our note HYPERLINK /R/10/LRg7xJ6lqKbM?docid=1097002 4-to- HYPERLINK /R/10/LRg7xJ6lqKbM?docid=1097002 3: Picturing the future, 11 June 2018) and outline our expectations of synergies, implications on DT FCF, dividends and valuations under different scenarios.4-to-3: Picturing the futureNote:All ou

52、r scenarios are based on the assumption that the deal secures the required regulatory approval over the coming months and for simplicity all our calculations are based on TMUS and Sprint being consolidated from the beginning of 1 July2019.Our high-level conclusions are based on the inputs and output

53、s from our Scenario B/ Cautiously optimisticcase.The tables/charts in the following pages are high-level summaries from our detailed scenario analysis model for Pro forma NewCo. Investors/readers looking for detailed pro forma models can HYPERLINK mailto:sunilrajgopal email us and we can provide the

54、 more detailedmodels.Our high-level conclusions for NewCo:is a to onEPS accretion wait until 2023e: Based on our pro forma model, we believe that the combined entitys EPS (accounting for integrations costs) will only start to be accretive in HYPERLINK l _bookmark7 On Feb 13 several lawmakers from th

55、e House of Representatives Energy and Commerce Committeeexpressedconcerns about the TMUS/Sprint tie-up; competition, jobs and impact on pricing stood out to be key worries.in in in at HYPERLINK l _bookmark7 NewCo: Synergies, implied equity value, EPS, FCF and leverage in HYPERLINK /R/10/LRg7xJ6lqKbM

56、?docid=1097002 HYPERLINK /R/10/LRg7xJ6lqKbM?docid=1097002 on HYPERLINK l _bookmark7 be isValue of synergies under different scenariosA aof We inB is a or to of We in a in usWein in We by in in in Scenario C (based on company synergy targets): This scenario largely reflects the values based on the co

57、mpanys targeted synergies (see page HYPERLINK l _bookmark7 10). Under this scenario, we assume the or (cUSD5.6bn opex synergies and cUSD400m of capex synergies). The opex synergies of USD5.6bn equate to 44% of Sprints stand-alone 2018e opex (excluding handset costs) or 17% of pro forma NewCo 2018 op

58、ex (excluding handset costs). We assume integration costs to be broadly in-line with company estimates (USD15bn) in thisscenario.Scenario D (blue sky): In this case, we illustrate the potential upside if the NewCo was able to run its operations with a similar cost structure to its peers like AT&T; t

59、his implies potential for USD6.7bn in opex and cUSD400m in capex synergies versus company target of USD6bn (opex + capex combined). We assume integration costs to bebroadly in-line with company estimates (USD15bn) in thisscenario.Illustration of synergy calculations and NPV of synergies (updated)USD

60、mScenario A Bear caseScenario CautiouslyoptimisticScenario Based oncompanysynergytargetsScenario D Blue-sky scenarioCost of services related synergy3,2943,4983,6334,171SG&A related synergy1,6141,7891,9642,502Total Opex synergy run-rate4,9085,2875,5976,673Total Opex synergies / total revenues (Sprint