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China Telecom Corp Ltd Class H 00728

Morningstar Rating
HKD 4.19 +0.10 (2.45%)
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Company Report

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.

Price vs Fair Value

00728 is trading at a 18% discount.
Price
HKD 4.09
Fair Value
HKD 5.00
Uncertainty
Low
1-Star Price
HKD 9.31
5-Star Price
HKD 8.00
Economic Moat
Lzyb
Capital Allocation
Glcvwmp

Bulls Say, Bears Say

Bulls

China Telecom's fixed-line business generates significant cash flow, which can be used to invest in its broadband and wireless networks.

Bears

China Telecom is the second smallest of the three big Chinese wireless telecom operators. Compared with its largest competitor, it lacks the scale to reduce unit costs.

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News

Trading Information

Previous Close Price
HKD 4.09
Day Range
HKD 4.094.20
52-Week Range
HKD 3.324.58
Bid/Ask
HKD 4.19 / HKD 4.20
Market Cap
HKD 383.41 Bil
Volume/Avg
77.3 Mil / 78.8 Mil

Key Statistics

Price/Earnings (Normalized)
10.17
Price/Sales
0.67
Dividend Yield (Trailing)
5.77%
Dividend Yield (Forward)
5.77%
Total Yield
5.77%

Company Profile

China Telecom is the largest fixed-line operator in China, originally covering 21 southern provinces. It has 190 million broadband customers, and 408 million wireless subscribers, having overtaken China Unicom to become the second-largest wireless operator in China behind China Mobile. The firm is increasing its cross-selling of products and seeing strong growth from industrial digitization services, such as internet data centers and cloud computing. Its internet data center business is already the largest in China and it is expanding overseas.
Sector
Communication Services
Industry
Telecom Services
Stock Style Box
Large Value
Total Number of Employees
280,683
See how this stock stacks up to its competitors with Morningstar Investor

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