UBS: Raise China Telecom's (00728) target price to HK$5.7 to maintain “buy” rating

The Zhitong Finance App learned that UBS released a research report stating that it will raise the target price of China Telecom (00728) by 1.8% from HK$5.6 to HK$5.7, maintaining a “buy” rating. The bank fine-tuned its 2026-2028 net profit forecast by 0% to 2% and postponed the cash flow discount model (DCF) valuation cycle backwards by 3 months.

China Telecom's revenue for the third quarter of 2026 was 121.9 billion yuan, down 2.9% year on year; EBITDA was 33.7 billion yuan, down 3.9% year on year; net profit was 6.6 billion yuan, down 14.7% year on year. The decline in revenue and EBITDA was narrower than in the second quarter, while the decline in net profit remained stable.

Management did not change the company's guidelines. Management previously indicated that revenue, EBITDA, and net profit after excluding VAT will grow steadily in 2026; the annual dividend payout ratio will remain the same as 75% in 2025, while capital expenditure intensity will continue to decline.