By Yifan Wang


China's telecom sector rallied on Tuesday on both mainland and Hong Kong stock markets as investors welcomed Beijing's latest policies for its national digitization.

As of the midday trading break, telecom equipment maker ZTE Corp. was up 6.05% in Hong Kong and 2.75% higher in Shenzhen. Telecommunications product supplier Nanjing Huamai Technology Co. Ltd. surged 10% in Shanghai.

Telecom carriers also advanced in Hong Kong with China Telecom Corp. Ltd. gaining 3.9%, China Unicom (Hong Kong) Ltd. 4.2% higher and China Mobile Ltd. up 2.4%.

The sector's rally came after China's top-level policy makers late Monday unveiled a national plan to develop the country's digitization industries, with a wide range of new measures including a bid to incorporate digitization goals into local governments' performance evaluations and plans to better ensure funding for relevant sectors.

Analysts at Zheshang Securities called the policy document "a positive for the development of the telecom sector." In particular, they pointed to the new plan's expected benefit to the three state-owned telecom majors. These companies--China Mobile, China Unicom and China Telecom--enjoy "advantages in funding and resources," the brokerage said. "They currently command over half of China's data center market," which is expected to gain from the fast-growing demand for data storage and data processing amid increasing digitization.

The telcos' growth outlook is further brightened by potential commercialization opportunities for their big data resources, which could be monetized in multiple ways as digitization levels deepen, the Zheshang analysts added.


Write to Yifan Wang at yifan.wang@wsj.com


(END) Dow Jones Newswires

02-28-23 0009ET