On average, shares of the telecommunications-related names were down 3.4%, underperforming the market (2.9%) on a ytd basis. Upstream components names underperformed downstream names. As at the end of 1Q21, China had built 819k 5G base stations, and had 392.1m 5G package customers, leading all other countries. The Chinese telecom operators are expected to roll out their 5G network and monetize it through the development of new applications. We maintain our cautious view on some upstream names, but remain constructive on midstream names, such as telecom equipment manufacturers (ZTE [0763.HK; ADD]), downstream applications names (AsiaInfo [1675.HK; ADD]), and telecom operators.
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