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<Research> Huatai Securities Cuts CHINA TELECOM (00728.HK) TP to HKD6.88; Smart Digital Revenue Growth Expected to Accelerate in AI Era
Recommend 12 Positive 14 Negative 18 |
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Huatai Securities issued a report noting that CHINA TELECOM (00728.HK) announced its operating results for 1Q26. Operating revenue was RMB131.394 billion, down 2.32% YoY. Of which, service revenue decreased 1.6% YoY to RMB122.7 billion. Net profit amounted to RMB7.35 billion, down 17.08% YoY, below the brokers previous forecast of RMB8.155 billion, mainly due to slower growth in traditional businesses and value-added tax adjustments. The broker highlighted that, according to statistics from the Ministry of Industry and Information Technology, telecom service revenue in 1Q fell 1.8% YoY, with the companys service revenue decline slightly narrower than the industry average. Over the long term, with the development of domestic AI applications and rapid expansion in intelligent computing demand, the National Data Administration expects Chinas average daily token calls to exceed 140 trillion by March 2026, representing YoY growth of 40%. Tianyi Cloud is accelerating its transformation toward token-based operations. The broker is optimistic about the companys industrial digitalization business prospects in the AI era and maintained a Buy rating. Taking into account the impact of VAT adjustments and slower growth in traditional business revenue, Huatai Securities lowered its net profit forecasts for 20262028 by 8% each year to RMB28 billion, RMB29.5 billion and RMB30.6 billion, respectively. The A-share TP for CHINA TELECOM (601728.SH) was cut from RMB8.16 to RMB8.11, while the H-share TP was reduced from HKD6.92 to HKD6.88. (ha/da) Auto-translated by AI This article was automatically translated by AI, the original language version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. More Details
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