hutchison 3g operations good money after bad 2003 was a tough year for h3g first the company ran out of phones and missed subscriber targets then end results caused much gnashing teeth could have been far worse if hadn t capitalised its customer acquisition costs there be more pain to come our 2004 forecasts show operating losses growing hk 21bn despite some 10bn pa being diverted balance sheet we find it hard see how can ever achieve an economic return on capital valuation is negative 63bn assuming funding all way whampoa estimates include assumption that walks away from ventures by fy 2006 with cash outflows building up perhaps shareholders may call time earlier cut 13 52 50 nav estimate 02 share 55 29 fair value 46 53 63 mainly increased group s exposure partially offset higher valuations
