Chunghwa Telecom Hits New 52-Week High: What's Driving it?

Shares of Chunghwa Telecom Co. Ltd. CHT scaled a new 52-week high of $38.59 during the trading session on Mar 28. However, the stock closed a tad lower at $38.49, up 1.05% from the closing price of Mar 27.

Catalysts Behind the Upside

Chunghwa Telecom is one of the largest telecommunications services company in Taiwan that provides fixed-line, mobile, broadband and Internet services. The telco continues to dominate the Taiwanese telecom market with its presence in 80% of the broadband market and 35% of the wireless market. It further intends to raise its market share in the 4G market in Taiwan to 40%. At the end of 2017, the 4G wireless subscribers base was 7.99 million.

Chunghwa Telecom reported impressive financial results for fourth-quarter 2017. Both earnings per share and revenues improved on a year-over-year (y/y) basis. Growth was witnessed across all segments

Further, the company continues to expand its subscriber base on the back of fiber-based high-speed next-generation FTTx (fiber to the home/building) offerings. The company is investing heavily to build a formidable FTTx network in Taiwan. As of Dec 31, 2017, total broadband subscriber base was more than 4.46541 million, of which FTTx subscriber base accounted for 79.5%, with around 3.55 million subscribers. Broadband subscribers signing up for 100 Mbps or higher speed connections were more than 1.28 million, up 9.5% year over year. 

The company also offers large-scale fiber-to-the-home (FTTH) and fiber-to-the-building (FTTB) access infrastructure to 75% of Taiwan's population. The growing demand for smartphones, which enjoy significant market penetration, acted as a tailwind. In fourth-quarter 2017, mobile Internet subscriber base was 7.35 million (up 7.2% y/y). The International /Domestic Fixed-line subscriber base was 10.69 million.

Moreover, the company has inked a strategic deal with Nokia Corporation NOK to jointly build 5G trial network at designated sites in 2018 and 2019 in Taiwan. The combination of Nokia's technologies and Chunghwa Telecom's solid R&D capabilities will give Taiwan an upper hand in 5G development.

The company also provides information and communication technology services to corporate customers and is expanding its cloud computing services.

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