China Telecom Earnings: Strong Revenue and Profit Growth Again; Fair Value Rises 12% to HKD 5.60

China Telecom's fourth-quarter 2023 results were stronger than those of its peers, with 8.4% services revenue growth compared with 5% for the industry; 4.1% EBITDA growth compared with a 3.8% decline for the industry; and 9.7% net profit growth compared with flat for the industry. China Telecom’s higher services revenue growth seemed to allow it to better offset the higher bonuses than its competitors. Overall, we see it as a solid result, given concerns over China’s economic slowdown. China Telecom’s strength in fixed-line telecoms—based partly on its historical fixed-line monopoly over around two thirds of China—kept it in good stead as industry growth has pivoted away from mobile. Over the past three years, industry mobile services revenue growth has averaged just under 3% per year, but nonmobile services revenue growth has averaged 16% per year, driven by industrial digitization. China Telecom seems to have retained its lead in this space despite heavy investment from the larger China Mobile, but the gap seems to be narrowing.