EBSCN·2024-08-21 10:36Investment Rating - The report maintains a "Buy" rating for China Telecom, indicating a positive outlook for the company's stock performance [3][4]. Core Views - The company achieved a revenue of RMB 266 billion in the first half of 2024, representing a year-on-year growth of 2.8%, with service revenue growing by 4.3%, surpassing industry growth rates [2]. - The report highlights a robust growth in core business areas, with a slight increase in ARPU (Average Revenue Per User) and a significant rise in digital transformation investments [2][3]. - The company plans to reduce its capital expenditure to below 20% of revenue in 2024, aiming for stable growth in revenue and EBITDA, while net profit growth is expected to exceed revenue growth [3]. Summary by Sections Financial Performance - In H1 2024, the company reported an EBITDA of RMB 76.8 billion, up 4.7% year-on-year, and a net profit attributable to shareholders of RMB 21.8 billion, reflecting an 8.2% increase [2]. - The mobile communication service revenue reached RMB 105.2 billion, with a net addition of 9.08 million mobile users, bringing the total to 417 million [2]. - The broadband user base increased by 3.19 million, totaling 193 million, with broadband ARPU at RMB 48.3, up by RMB 0.1 [2]. Investment and Growth Strategy - The company completed capital expenditures of RMB 47.2 billion in H1 2024, a 13% increase year-on-year, with significant investments in mobile networks and digital transformation [2]. - The report notes that the company has enhanced its 5G network coverage, with over 1.31 million 5G base stations established [2]. - The cloud business revenue grew by 20.4% to RMB 55.2 billion, with a 29% increase in 2B customers, indicating strong market demand [2]. Future Outlook - The company forecasts stable growth in revenue and EBITDA for 2024, with net profit growth expected to outpace revenue growth [3]. - The projected net profit for 2024 is RMB 33.1 billion, with corresponding P/E ratios of 17X for A-shares and 12X for H-shares [3][4]. - The current dividend yield is projected at 4.3% for A-shares and 6.1% for H-shares, reinforcing the company's commitment to returning value to shareholders [3].