Glonghui, March 18 | J.P. Morgan Chase released a report stating that due to the fundamental differences in Hong Kong Telecom stocks and the outlook for US interest rates is still uncertain, the bank advises investors to select stocks selectively. According to the bank, PCCW downgraded its rating from “increase” to “neutral” after outperforming its peers by about 30% since last year. Due to concerns about dividend prospects and potential profit pressure, the target price was lowered from HK$4.4 to HK$4, which is equivalent to 6.3 times the predicted embedded value of EBITDA. At the same time, Hong Kong's broadband rating was cut from “increasing holdings” to “reducing holdings” because of structural problems with the company's execution, corporate governance and balance ratio. It is believed that no turnaround is expected in the short term. The target price was lowered from HK$4.5 to HK$2.4, which is equivalent to 5 times the predicted embedded value of EBITDA and 7 times the price-earnings ratio. According to Motong, HKT is the bank's first choice for Hong Kong Telecom stocks, with a target price of HK$11. The rating is “increase in holdings” due to defensive and resilient business performance; an impressive 9% interest rate; and profit or dividend growth. Next is PCC Telecom, then Hong Kong Broadband.