Several brokerages - including listing sponsor Morgan Stanley - have downgraded China Unicom's investment rating after the telecommunications carrier reported an interim profit below analysts' projections. Morgan Stanley said it had cut China Unicom's 12-month target price by 15.7 per cent to HK$16, down from its original forecast of HK$19. It also revised down its profit forecast by 5 per cent to 4.3 billion yuan (about HK$4.02 billion). Despite the revisions, the United States brokerage house said Unicom was still one of Asia's most attractive telecoms investments. It said the downgrading of the stock's target price was due to 'global events'. In a separate report, however, Morgan Stanley upgraded its rating on Unicom's rival, China Mobile, to 'outperform' from 'neutral', putting a 12-month price target of HK$25 on the stock. 'We believe China Mobile's strong cash-flow generation ability also provides investors with a safe haven amid a volatile investment environment,' Morgan Stanley said. Meanwhile, Nomura International put an 'underperform' rating on Unicom stock. The Japanese firm - which forecast a 2.9 billion yuan first-half net profit for Unicom - said in a note to clients that it had slashed China Unicom's full-year earnings forecast by 26 per cent to 4.43 billion yuan, down from a forecast of six billion yuan. Unicom shares dropped 4.27 per cent yesterday to finish at HK$7.85, while China Mobile ended 3.6 per cent higher at HK$20.10. Unicom reported on Wednesday it had recorded 2.19 billion yuan net profit for the first six months, at the lower end of analysts' forecasts, which ranged between two billion yuan and 2.9 billion yuan. It said a contraction in wireless ebitda (earnings before interest, tax, depreciation and amortisation) margin and a fall in wireless average revenue per user reflected its aggressive pricing and promotion strategy. Promotions have sparked investor concerns of a heating up in the price war between the rivals. Wang Jianzhou, chairman and executive director of Unicom, admitted that some branches were involved in 'irregular pricing policies'. But he said the company would tighten controls on tariffs offered by individual branches to ensure full compliance with the telecoms regulator's guidelines.