Core Viewpoint - China Telecom is enhancing its industrial chain through the establishment of two new alliances aimed at driving digital consumption and data operations, marking a shift towards a more intelligent and collaborative development phase in the industry [1] Group 1: Digital Consumption Rights Ecosystem Alliance - The Digital Consumption Rights Ecosystem Alliance focuses on resource integration and consumer activation, aiming to support public services and industrial growth through platform empowerment [1] - This alliance is designed to facilitate the transition towards a more digital and consumer-oriented economy [1] Group 2: Penetrative Regulatory Ecosystem Alliance - The Penetrative Regulatory Ecosystem Alliance utilizes China Telecom's self-developed intelligent regulatory platform, "Yufeng," to strengthen enterprise risk control measures [1] - This initiative aims to create a robust risk management framework for businesses, ensuring compliance and security within the industry [1] Group 3: Synergy and Innovation - Both alliances are complementary, working together to build an open, intelligent, and secure industrial ecosystem [1] - The collaboration is expected to inject innovative momentum into the high-quality development of the industrial chain [1]

Core Viewpoint - China Telecom has introduced an AI-driven low-altitude economy capability system during the 2025 Digital Technology Ecological Conference, aiming to enhance the application of networked drones across various sectors [1] Group 1: Product Launches - The company launched the Tianyi Star Shield low-altitude reconnaissance countermeasure platform [1] - The Tianyi Star Kan low-altitude government unified flight platform was also introduced [1] - An upgrade to the Tianyi Star Cloud low-altitude flight operation platform to version 5.0 was announced [1] Group 2: Strategic Focus - China Telecom aims to accelerate the cultivation of open low-altitude economic scenarios [1] - The company is focusing on deepening applications in unified flight, rural governance, public security, and emergency rescue [1] - A collaborative force for low-altitude emergency rescue has been established [1] Group 3: Project Implementation - The company has implemented over 500 projects across 30 provinces in China [1] - The scale of networked drone applications is being promoted for further development [1]

Core Insights - The 2025 Digital Intelligence Technology Ecological Conference, hosted by China Telecom, focuses on the theme "Intelligent Navigation, Intelligent Coexistence," discussing trends in AI, satellite communication, and low-altitude economy [1] Group 1: AI Development and Collaboration - The "Intelligent Cloud Ecosystem" is a key topic at the conference, emphasizing the importance of collaboration among network operators, cloud service providers, and terminal manufacturers for AI's widespread adoption [3][6] - Qualcomm's Chairman in China, Meng Pu, highlights that the rapid evolution of large models and network infrastructure has laid the foundation for AI development, stressing the need for a collaborative approach among cloud, network, and terminal sides to realize AI's potential [3][4] Group 2: Practical Applications and Innovations - Qualcomm has collaborated with China Telecom over the past year to develop terminal-side AI applications, including the Tianyi AI glasses and the Maigang AI phone, which allows users to access AI services easily [4][7] - The focus on terminal-side AI is crucial for addressing privacy, security, performance, and latency issues, making it essential for AI to operate close to users rather than solely relying on data centers [6][7] Group 3: Future Outlook - For AI to be truly accessible, it must meet three conditions: strong cloud capabilities, stable network performance, and intelligent terminal devices, aligning with the conference's theme of making AI services available to everyone [3][6]

Core Insights - The conference focused on the development of the AI+ visual internet ecosystem, highlighting the importance of collaboration and innovation in the industry [1] Industry Trends - National policies have emphasized "AI+ security" as a key integration application direction, promoting intelligent front-end deployment and platform integration [3] - The market for "AI+ security" is rapidly expanding, driven by demand iteration and the rise of large models and multimodal technologies, enhancing AI algorithm capabilities [3] - Technological advancements, such as DeepSeek, have significantly lowered the application threshold for large models, shifting the core engine of AI development from computing power to data-driven approaches [3] Strategic Implementation - The company aims to solidify its position in national video infrastructure through the "1233 strategy," focusing on technological innovation and open collaboration as core competitive advantages [3] - Emphasis on the integration of cloud, network, terminal, intelligence, data, and security to tackle core technologies [4] - Development of a unified platform that integrates "one network, one cloud" to enhance operational efficiency [4] Core Capabilities - The company has achieved end-to-end security that is self-controlled, creating a differentiated advantage [4] - A comprehensive terminal system has been established for both consumer and industry applications [4] - AI application upgrades have been implemented through standardized products, enabling AI+ empowerment across multiple industries [4] Domestic and International Development - The company has achieved integrated operational services and collaborative governance in the domestic visual internet sector [4] - Strengthening partnerships with overseas operators to create a comprehensive capability supply system and innovate export models [4] Ecosystem Collaboration - The company advocates for an open cooperation development philosophy, emphasizing the importance of collaborative capabilities across the entire ecosystem [4] - Achievements include the integration of platforms, terminals, applications, AI, data, and capital into a cohesive operational framework [4] Collaborative Logic - The company adheres to four major cooperation logics: integration of industry and capital, synergy of self-research and collaboration, coordination of development and security, and interaction between centralized and decentralized approaches [5] - A commitment to high-quality development through deep integration of AI and terminals, alongside an open ecological cooperation path [5]

Core Insights - The 2025 Digital Technology Ecological Conference in Guangzhou highlights China's Telecom's commitment to embracing artificial intelligence (AI) and upgrading its strategy from "cloud transformation" to "intelligent benefits" [1][2] - AI terminals are significantly changing lifestyles, with various innovative products showcased at the conference [1] Group 1: AI Capability Enhancement - China Telecom is systematically building its AI capabilities, with its "Star Sea" data intelligence platform gathering over 10 trillion tokens of general model corpus and 14 industry datasets, totaling over 350TB [2] - The company employs a dual-track strategy of "independent + ecosystem" for model development, launching over 80 industry models and 30 intelligent applications, serving more than 20,000 industry clients [2] Group 2: Innovative Consumer Products and Experiences - The launch of the new generation Tianyi AI Central Screen integrates communication, entertainment, security, and smart home control, enhancing digital life with a focus on user interaction [4] - The "Star Little Chen Terminal Intelligent Agent" redefines call experiences with features like real-time fraud alerts and smart meeting assistance, enhancing both personal and professional communication [5] Group 3: Collaboration and AI Terminal Popularization - China Telecom initiated the AI + Terminal Cooperation Star Plan, signing key partnerships with major companies like Huawei and Xiaomi to expand its terminal ecosystem [7] - The "Jingyi Huanneng Plan" with JD.com allows consumers to enjoy operator subsidies and a seamless purchasing experience for AI devices, enhancing service efficiency [7][8] Group 4: Consumer Incentives and Outreach - In Shaanxi, over 1,000 mobile sales stores are integrated into the "National Subsidy" program, offering substantial discounts on AI devices, with some models seeing up to 2,000 yuan in total savings [8] - The "AI Terminal Going to the Countryside" initiative in Shandong promotes AI technology in rural areas, resulting in a 45% increase in AI terminal sales in covered counties [8] Group 5: Service Innovations - The "Telecom to Home" service allows users to book professionals for various business operations and terminal deliveries, enhancing customer service and convenience [10]

Core Insights - The report highlights a shift in capital expenditure by telecom operators towards computing infrastructure, driven by a reduction in traditional telecom network spending and an increasing demand for AI capabilities [3][4]. Capital Expenditure Trends - In 2024 and the first half of 2025, capital expenditure by Chinese telecom operators is expected to decline, primarily due to reduced spending on traditional telecom networks like 5G. However, there is a notable increase in investments in AI and computing infrastructure to meet growing market demands [4][8]. - Goldman Sachs projects that despite a further decrease in telecom network spending in 2025, the growth in capital expenditure related to intelligent computing capabilities will partially offset this decline, leading to an overall decrease in annual capital expenditure [8]. Specific Operator Projections - China Telecom is expected to have a capital expenditure of 84 billion RMB in 2025, down from 94 billion RMB in 2024, with an increase in investments related to computing platforms [8]. - China Unicom's capital expenditure is projected to be 55 billion RMB in 2025, down from 61 billion RMB in 2024, primarily due to reduced 5G-related capital expenditure, but with a simultaneous increase in AI infrastructure investments [8]. Competitive Advantage - Telecom operators possess their own Internet Data Center (IDC) resources, which reduces reliance on external IDC suppliers and helps lower overall operational costs [7].

Core Insights - The top three companies by Hong Kong Stock Connect holding ratios are China Telecom (00728) at 72.68%, Green Power Environmental (01330) at 69.12%, and Da Zhong Public Utilities (01635) at 69.03% [1] - Alibaba-W (09988), Meituan-W (03690), and Pop Mart (09992) saw the largest increases in holding amounts over the last five trading days, with increases of +3.329 billion, +1.319 billion, and +1.060 billion respectively [1] - The largest decreases in holding amounts were observed in Zijin Mining (02899) at -861 million, SMIC (00981) at -815 million, and Lenovo Group (00992) at -430 million [1][2] Hong Kong Stock Connect Holding Ratios - China Telecom (00728): 100.87 billion shares, 72.68% holding ratio [1] - Green Power Environmental (01330): 2.80 billion shares, 69.12% holding ratio [1] - Da Zhong Public Utilities (01635): 3.68 billion shares, 69.03% holding ratio [1] - Other notable companies include Haotian International Construction Investment (01341) at 68.75% and China Shenhua (01088) at 67.00% [1] Recent Increases in Holdings (Last 5 Trading Days) - Alibaba-W (09988): +3.329 billion, +21.6752 million shares [1] - Meituan-W (03690): +1.319 billion, +13.7526 million shares [1] - Pop Mart (09992): +1.060 billion, +4.9058 million shares [1] - Other companies with significant increases include ZTE Corporation (00763) and China Merchants Bank (03968) [2] Recent Decreases in Holdings (Last 5 Trading Days) - Zijin Mining (02899): -861 million, -26.2640 million shares [2] - SMIC (00981): -815 million, -12.1252 million shares [2] - Lenovo Group (00992): -430 million, -43.6821 million shares [2] - Other companies with notable decreases include China Mobile (00941) and China Pacific Insurance (02328) [2]

Core Viewpoint - The appointment of Wang Benxing as the new discipline inspection secretary of Liaoning Telecom is notable as he is not being transferred from within the system, which is a rare occurrence in the industry [1][3]. Group 1: Personnel Changes - Wang Benxing, born in 1977 and from Panjin, has previously held positions in the Panjin City Discipline Inspection Commission, including Deputy Secretary and Deputy Director of the Municipal Supervisory Commission [3]. - This personnel adjustment is unusual as typically, the discipline inspection secretary of provincial telecom companies is promoted or transferred from other provincial companies or the group, often having a background in business or specialized in discipline inspection [3]. - Wang Benxing replaces Yang Jinquan, who has served as the discipline inspection secretary for four years and has a background in Shandong Telecom [3]. Group 2: Industry Trends - The increasing frequency of talent exchanges between telecom operators and other systems is noted, with many outstanding officials being transferred out while new talents are brought in [3]. - Such personnel adjustments are expected to significantly optimize the structure of the cadre team within the telecom industry [3].

Core Insights - The 2025 World IoT 500 Summit was held in Beijing, revealing that China has the highest number of companies on the list, followed by the United States. Huawei retains the top position, with Microsoft, China Aerospace Science and Technology Corporation, China Aerospace Science and Industry Corporation, Schneider Electric, Bosch, China Telecom, Haier, China Mobile, and Roscosmos rounding out the top ten. Notably, companies like Origin Quantum, Starlink IoT, and DeepSeek made their debut on the list [1][3][10]. Summary by Category Overall Rankings - The 2025 World IoT 500 list includes Huawei at the top, followed by Microsoft, China Aerospace Science and Technology Corporation, China Aerospace Science and Industry Corporation, Schneider Electric, Bosch, China Telecom, Haier, China Mobile, and Roscosmos [3][5][11]. Digital Economy - The global digital economy surpassed $40 trillion this year, with an increase of nearly 8%. The GDP of the top 500 companies amounts to $25 trillion, making them a significant driver of global digital economic growth, with IoT-supported digital economy accounting for over half [2][11]. New Entrants - High-tech and AI companies such as Origin Quantum, Starlink IoT, and DeepSeek have entered the rankings for the first time, indicating a growing recognition of advanced technology firms in the IoT space [1][12].

Core Viewpoint - Goldman Sachs believes that despite the weak revenue growth in traditional telecommunications, Chinese telecom companies can drive consumption by offering more value-added services, particularly in areas such as data centers, computing power, and AI solutions, positioning them as major beneficiaries of AI development [1] Group 1: Financial Metrics and Performance - Goldman Sachs analyzed ten key indicators including capital expenditure, dividends, user numbers, cash cycle, free cash flow margin, average revenue per user (ARPU), EBITDA margin, new business synergies, internet data center performance, and valuation [1] - The report indicates that capital expenditure budgets of major telecom companies are shifting towards computing infrastructure to capitalize on the growing demand for AI in China [1] Group 2: Investment Outlook - Goldman Sachs maintains a "Buy" rating for China Mobile (00941), China Unicom (00762), and China Telecom (00728), expecting an increase in the contribution from new businesses and a steady rise in dividend payout ratios, which will provide ongoing returns for investors [1]