Citibank: Maintaining China Telecom's (00728) “Buy” Rating Target Price of HK$5.7, which falls short of net profit expectations for the third quarter

The Zhitong Finance App learned that Citibank released a research report saying that China Telecom (00728)'s net profit for the third quarter of 2026 fell short of expectations, but the EBITDA performance was better than expected, reflecting that non-operating projects in the third quarter were lower than expected and recorded fair value losses. The bank maintains China Telecom's “buy” rating and target price of HK$5.7.

China Telecom's third-quarter revenue was 121,931 billion yuan, down 3% year on year, roughly in line with the bank's and market expectations; EBITDA was 33.682 billion yuan, down 4% year on year, but higher than the bank and market expectations of 4% and 1% respectively, and the EBITDA profit margin was 27.6%, which was 1.3 percentage points higher than the bank's and market expectations, respectively.

According to the bank, China Telecom's net profit for the third quarter was 6.62 billion yuan, down 15% year on year, lower than the bank's and market expectations of 4% and 2%, respectively. The divergence between better-than-expected EBITDA and lower-than-expected net profit reflected lower than expected non-operating projects in the third quarter and recorded fair value losses.