Minsheng Securities·2024-08-21 12:30Investment Rating - The report maintains a "Recommended" rating for China Telecom (601728.SH) [2][3] Core Views - In H1 2024, China Telecom achieved operating revenue of 266 billion yuan, a year-on-year increase of 2.8%, and a net profit attributable to shareholders of 21.8 billion yuan, up 8.2% year-on-year [1] - The company reported a significant increase in mobile communication service revenue, reaching 105.2 billion yuan, a growth of 3.6% year-on-year, with mobile value-added and application service revenue growing by 17.1% [2] - The company plans to increase its cash dividend payout ratio to over 75% of the profit attributable to shareholders within three years, with a mid-year dividend of 0.1671 yuan per share, reflecting a 16.7% increase year-on-year [2] Summary by Sections Financial Performance - In H1 2024, the company achieved a net profit of 21.8 billion yuan, with a growth rate of 8.2% year-on-year, and a net profit margin of 6.0% [1][7] - The operating revenue for Q2 2024 was 131.5 billion yuan, with a year-on-year growth of 2.0% [1] - The company’s operating expenses increased by 2.4% year-on-year, while the operating cash flow decreased by 11.2% due to longer collection periods in the digital industry [2] User Growth and Revenue Streams - The mobile user base reached 417 million, with a 2.2% year-on-year increase, and 5G package users accounted for 80.8% of the total, growing by 5.6% [2] - Fixed broadband users reached 193 million, with a 1.7% year-on-year increase, and the average revenue per user (ARPU) for broadband was 48.3 yuan, up 0.2% [2] Capital Expenditure and Future Projections - Capital expenditure for H1 2024 was 47.2 billion yuan, a 13.5% increase year-on-year, with 34% allocated to digital industry initiatives [2] - The report forecasts net profits of 33.7 billion yuan, 37.1 billion yuan, and 41.0 billion yuan for 2024, 2025, and 2026 respectively, with growth rates of 10.5%, 10.3%, and 10.6% [2][3]