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China Telecom Corp Ltd Class H 00728

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Morningstar’s Analysis

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China Telecom Reports a Solid Third Quarter and Continues to Look Inexpensive

Dan Baker Senior Equity Analyst

Analyst Note

| Dan Baker |

In our view, no-moat China Telecom continues to be undervalued after reporting another strong result for third-quarter 2021. Services revenue grew 7.5%, with EBITDA up 3.2%, and underlying net profit up 17.6%. While this represented a mild slowdown from first-half growth of 8.8%, 5.1%, and 17%, respectively, in our view, it is still very solid growth for a stock trading on such inexpensive multiples.

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Company Profile

Business Description

China Telecom is the largest fixed-line operator in China, originally covering 21 southern provinces. It has 108 million fixed-line subscribers, 164 million broadband customers, and 362 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, with 430,000 cabinets.

31 Jinrong Street, Xicheng District
Beijing, 100033, China, People's Republic of
T +86 1058501800
Sector Communication Services
Industry Telecom Services
Most Recent Earnings Sep 30, 2021
Fiscal Year End Dec 31, 2020
Stock Type
Employees 281,192