UPDATE: Credit Suisse Upgrades China Telecom to Outperform; Iphone Subsidy Priced In

Credit Suisse raised its rating on China Telecom

from Neutral to Outperform as concerns related to an earning shock from iPhone subsidies are largely priced into the valuation. Credit Suisse noted, "We note that consensus earnings forecasts have been drifting down over the last two months, and that our FY12 and FY13 earnings forecasts are now only 0.9% and 1.7% below consensus respectively. Thus we believe that higher subsidies, and therefore lower net profit growth, have largely been factored in by sell-side analysts, and priced in by the stock market. We also expect that the number of iPhone 5s sold during December 2012 will be controlled carefully by China Telecom (relatively given China Telecom's use of EVDO versions of the iPhone 5), so that a 4Q12 earnings shock will be avoided." China Telecom closed at $52.04 on Wednesday.