China Unicom reverse the city climb 4% but the big line is recommended to sell

China Unicom, which has been significantly shaken after breaking the year line, has jumped from the big city this morning, with shares now up 3.97% to HK $11.52, trading 47.24 million shares.　　However, it is recommended that high selling is not an attractive valuation because the fundamentals have not improved. Credit Suisse issued a report saying that maintaining China Unicom is weaker than the market rating, advising investors to sell and change the code to China Mobile (00941-HK), the target price of only HK $7, compared to market price discount of 39%.　　China Unicom's share price soared in the past 3 trading days without special good news and fundamentals unchanged, making its valuations no longer attractive, equivalent to 24 times times the 2009 forecast. DBS also lowered the Unicom rating from holding to selling, as valuations tightened, with a target price of HK $8.6 and a discount to market prices. The bank expects Unicom's 3G business to not have a significant revenue contribution until 2010, as network capacity and coverage are limited, and as the 3G business proceeds, depreciation and operating expenses associated with 3G will erode profits after the middle of 2009. This means Unicom's 3G business may not be able to achieve break-even by 2010.