< The 2015 All-Asia Research Team
Total appearances: 18
Team debut: 1996Holding steady at No. 1 is Morgan Stanley’s six-person crew headed by Navin Killa. “I find that the team has a deep understanding of the sector, and they are happy to talk at very short notice,” one fund manager reports. The analysts are stationed in Hong Kong, Mumbai, Seoul and Sydney. At the beginning of this year, they turned cautious on telecommunications operators in emerging markets, “where we believe slowing revenue growth — because of [short message service] substitution — and continued [capital expenditure] required to build [third- and fourth-generation] networks will put dividend growth at risk,” explains Killa, 39. China and Thailand, however, are bright spots in the group, he and his colleagues believe. Developments related to wireless telecom tower asset transfers in the former and 3G migration in the latter will lead to positive margin and return on invested capital trends for providers in these countries over the coming years. Specifically, they favor China Telecom Corp., China Unicom (Hong Kong) and Thailand’s Advanced Info Service. The squad remains comfortable with the telecoms industry in more advanced countries, since “data monetization has resulted in steady revenue growth, with margins stabilizing or even improving as handset subsidies and network operating expenses start to stabilize,” says Killa. Their preferred stocks in these markets are Hong Kong’s SmarTone Telecommunications Holdings, Singapore Telecommunications and SK Telecom Co. of South Korea.