China Telecom (CHA, quote) has been shaky in the stock market, hitting a 52-week low on January 18. DBS Group Research likes the company’s prospects, though, especially since China Telecom is expected to start selling the iPhone 4S in February.
According to Tsz Wang Tam of DBS Group, the stock sell-off can be attributed to “heightened concerns over intensifying mobile market competition.” A new Apple (AAPL, quote) phone would do a lot to answer those concerns.
In a January 31 press release, China Telecom said its CDMA-version iPhone 4S is likely to hit the domestic market by the end of February, or at the beginning of March. According to an article in China Daily, some telecom experts expect the phone to arrive sooner rather than later, since China Telecom already has all the necessary regulatory approvals.
Morgan Stanley VP Katy Huberty predicts Apple will sell at least 24 million additional iPhones in China in 2013. With 15 million current subscribers, 20% of which are likely to pick up the new phones, China Telecom should get a respectable share of those sales.
Tam sees this development as a positive for the stock, and is maintaining a “BUY” recommendation.