Merger with Ooredoo Strengthens Hutch's Indonesian Telco Ops but Doesn't Move our FVE

While we see the merger with Ooredoo Indosat, or OI, as a positive boost to CK Hutchison's, or CKH's, Indonesian mobile telecommunication operations, it has minimal impact to our earnings outlook and fair value estimate for CKH. We estimate that CKH's 2022 profit may be lifted by less than 1% but it's still a good move as otherwise CKH's Indonesian mobile business is likely to stagnate in the face of intense competition. We should see improved scale from necessary investment in its 5G network. The announced merger caps negotiations that started last year so it should come as little surprise. We leave our fair value estimate unchanged at HKD 80 for CKH. CKH remains attractive to investors looking for value and shelter from market volatility.