China Unicom (ADR: CHU, Hong Kong Stock Code 0762) ended Wednesday at HK$11.36 (equivalent to ADR US$14.64), a 3-month low, after hitting an intraday low of HK$11.24 in early afternoon session.

After market close, China Unicom said it added a total of 3.669 million 3G subscribers in January, faster than the pace of 3.132 million in the previous month, with the aggregate 3G user size growing to 80.125 million by the end of last month. There were 3.605 million net additions of mobile subscribers in January, bringing the aggregate number of mobile subscribers to about 243 million. Regarding fixed-line business, the number of local access subscribers and broadband subscribers rose 128,000 and 682,000 last month, with the total customer size reaching 92.085 million and 64.551 million.

Yesterday Deutsche Bank lifted its target price for China Unicom to HK$18.3 from HK$17.5, and maintained its “buy” rating. The research house said discussions both with China Unicom’s management and its suppliers suggest that the company is seeking to tighten up on internal controls relating to capex and other items of spend. Deutsche Bank increased its 2013 capex from RMB75b to RMB80b, but said this should mark a 20% reduction YoY in spend. As a result, FCF could top RMB15b in 2013. This favorable trend combined with a decline in cost elements such as subsidy-to-revenues, should deliver significant EPS growth this year.