UPDATE: Nomura Reiterates Neutral Rating, Lowers PT on AsiaInfo-Linkage

In a report published Friday, Nomura reiterated its Neutral rating on AsiaInfo-Linkage ASIA, but lowered its price target from $14.00 to $12.00. Nomura noted, “Fundamentals improving, but share price determined by privatization process. We see AsiaInfo-Linkage‟s fundamentals as likely to improve because of new IT investment by telecom carriers in 2013 to cope with tax reform in the telecom industry, 4G/LTE and MVNO (Mobile Virtual Network Operators). However, we think privatization-related news flow will remain the most important factor influencing near-term share price performance. We lower our earnings forecasts to reflect rising operating expenses and revise our TP to USD12 (10x P/E) while maintaining our Neutral rating. AsiaInfo-Linkage reported 4Q revenue of USD166mn (+26.4% y-y) and non-GAAP EPS of USD0.41 (+37% y-y), both in line with market expectations. We believe the company‟s short-term price will remain strongly influenced by ‘go private' news flow.” AsiaInfo-Linkage closed on Thursday at $11.10.