Citibank: Maintaining China Telecom's (00728) “Buy” Rating Net Profit Wins Expectations for the Second Quarter

The Zhitong Finance App learned that Citi released a research report stating that it maintains China Telecom (00728)'s “buy” rating, with a target price of HK$5.7. The bank indicates that China Telecom's revenue for the second quarter fell 5% year on year, lower than the bank and market expectations; EBITDA fell 8% year on year and net profit fell 14% year on year, all higher than the forecast; paid an interim dividend of RMB 16.06 cents per share, down 11.4% year on year, which is less than the decline in net profit. The dividend ratio also rose to 75% from 72% in the same period last year, reflecting management's commitment to continuously improve shareholder returns. According to the report, the artificial intelligence and token economy are developing rapidly, and the number of daily token calls has almost doubled in the past two quarters. China Telecom's computing revenue increased by more than 50% year over year, and AIDC revenue increased 9.3% year over year. Management also maintained steady growth targets for revenue, EBITDA, and net profit.